1. The immunosuppressive and anti-inflammatory drug leflunomide has several sites of action, although its precise mode of action is unknown. 2. Here we show in vitro and in vivo that leflunomide and/or its active metabolite A771726, inhibit the activity of cyclo-oxygenase (COX) at doses below those that affect protein expression. 3. In J774.2 macrophages treated with endotoxin for 24 h to induce COX-2 and iNOS, leflunomide and A771726 inhibited more potently the accumulation of PGE2 (A771726, IC50 3.5 microg ml-1) than of NO2 (A771726, IC50 380 microg ml-1). At high concentrations (>300 microg ml-1) A771726 also exhibited the expression of COX-2 and iNOS proteins. 4. In A549 cells treated for 24 h with interleukin-1beta, to induce COX-2, A771726 potently inhibited PGE2 synthesis (IC50 0.13 microg ml-1). In the same cells, A771726 was notably less active (IC50, 52 microg ml-1) at inhibiting the formation of PGE2 stimulated by exposure to 30 microM arachidonic acid. 5. In a human whole blood assay, measuring the accumulation of TxB2 in response to calcium ionophore as a measure of COX-1 activity and in response to incubation with bacterial endotoxin as a measure of COX-2 activity, leflunomide inhibited COX-1 and COX-2 with IC50 values of 31 and 185 microg ml-1; for A771726 the corresponding values were 40 and 69 microg ml-1. 6. Pre-treatment of rats with leflunomide or A771726 (10 mg kg-1, i.p.) inhibited the plasma accumulation of 6-keto-PGF1alpha but not NO2/NO3 following infusion of endotoxin. Injection of a bolus of arachidonic acid following 6 h infusion of endotoxin caused a marked acute rise in plasma 6-keto-PGF1alpha which was inhibited only by higher doses of A771726 (50 mg kg-1, i.p.). 7. In conclusion, leflunomide via A771726 can directly inhibit the activity of COX, an effect that appears blunted both by increases in substrate supply and possibly by plasma binding. Only at much higher drug levels does leflunomide and/or A771726 inhibit the induction of COX-2 or iNOS proteins.