The active metabolite of leflunomide. A771726, is a novel immunosuppressive compound that has been shown to be a powerful antiproliferative agent for mononuclear and T-cells. The molecular mechanism of action for this compound has not been clearly established. In vitro cellular and enzymatic assays, however, demonstrate that leflunomide is an inhibitor of several protein tyrosine kinases, with IC50 values between 30 and 100 microM. The in vivo properties of A771726 are reminiscent of another immunosuppressive agent, brequinar sodium, which has been shown to be a nonomolar inhibitor (Ki = 10-30 nM) of the enzyme dihydroorotate dehydrogenase (DHODase). On the basis, we have investigated the effects of leflunomide and A771726 on the activity of purified recombinant human DHODase. We find that A771726 is a potent inhibitor of DHODase (Ki = 179 +/- 19 nM), while the parent compound, leflunomide, had no inhibitory effect at concentrations as high as 1 microM. Studies of the dependence of inhibition on the concentrations of the substrates ubiquinone and dihydroorotate demonstrate that A771726 is a competitive inhibitor of the ubiquinone binding site and is noncompetitive with respect to dihydroorotate. The potency of A771726 as a DHODase inhibitor is thus 100-100-fold greater than that reported for its inhibition of protein tyrosine kinases. These data suggest that an alternative explanation for the immunosuppressive efficacy of A771726 may be the potent inhibition of DHODase by this compound.