GW506U78 or nelarabine (Glaxo-SmithKline) is a nucleoside analog that is rapidly converted by cells of lymphoid lineage to its corresponding arabinosylguanine nucleotide triphosphate (araGTP). The triphosphate form of araG acts as a substrate for DNA polymerases and araG gets incorporated into the DNA, resulting in inhibition of DNA synthesis and subsequent cytotoxicity. It has been shown that nelarabine has activity as a single agent in patients with T-cell malignancies that have relapsed or are refractory to other therapy. The ongoing research on nelarabine has earned fast-track status from the U.S. Food and Drug Administration (FDA) for treatment of patients with T-cell acute lymphoblastic leukemia and lymphoblastic lymphoma who have not responded to or whose disease has progressed during treatment with at least two standard regimens. It is likely that nelarabine will be a useful drug in the treatment of leukemic diseases in the future and therefore nelarabine is an interesting drug to study further. Here we present an overview of what is known about the mechanism of action of nelarabine and its status in clinical trials.