Tacolimus (FK506) is a potent immunosuppressive agent with significant nephrotoxic properties. FK506 is complexed with an intracellular binding protein FKBP-12. Both the immunosuppressive and nephrotoxic effects may be linked to the inhibitory effect of this complex on calcineurin. The initial phase of FK506 nephrotoxicity is associated with a reduction in renal blood flow and glomerular filtration rate. More significant microvascular injury may follow with endothelial damage. Tubular epithelial cell vacuolation, atrophy and micocalcification may be associated with the development of irreversible interstitial fibrosis. At times, mesangial cell proliferation adds to the glomerular abnormalities. These effects may be mediated by the inhibitory effect on calcineurin and its role in regulating cellular calcium channels. FK506 stimulates several inflammatory cytokines, such as transforming growth factor-beta, with potential deleterious effects. Also abnormalities in the reninangiotensin system, endothelin, renal prostaglandins, adrenergic receptors may all play a role in the nephrotoxic effects.