With the development of new immunosuppressive agents, the focus of anti-rejection therapy has shifted from prevention of acute allograft rejection to an emphasis on sufficient immunosuppression with minimal toxicity. Mycophenolate mofetil (MMF) is a recently developed immunosuppressive drug, which acts to inhibit T and B cell proliferation by blocking the production of guanosine nucleotides required for DNA synthesis. It also prevents the glycosylation of adhesion molecules that are involved in attachment of lymphocytes to endothelium and potentially in leukocyte infiltration of an allograft during an immune response. High-quality randomized clinical trials have demonstrated that MMF, when used with cyclosporine (CsA) and steroids, reduces the frequency and severity of acute rejection episodes in kidney and heart transplants, improves patient and graft survival in heart allograft recipients and increases renal allograft survival at 3 years. It has also been effective in reversing acute and resistant rejection episodes in heart, kidney and liver recipients. The ability of MMF to facilitate sparing of other immunosuppressive agents, particularly in CsA-related nephrotoxicity, is also promising. By permitting reduction in CsA doses, MMF may stabilize or improve renal graft function in patients with CsA-related nephrotoxicity or chronic allograft nephropathy. Early results of phase I and II trials evaluating MMF therapy in liver and combined pancreas/kidney transplant recipients are encouraging. The main adverse effects associated with oral or intravenous MMF are gastrointestinal and hematologic in nature. Although the direct costs of using MMF vs. azathioprine (AZA) are higher, the decreased incidence and treatment of acute rejection in patients treated with MMF supports its use as a cost-effective option during the first year following transplantation.Thus, MMF has become an important therapeutic tool in the transplant clinician's armamentarium. Ongoing issues to be resolved in clinical trials include the role of MMF in the absence of other potent agents, e.g., as monotherapy or with a steroid but without calcineurin inhibitor; whether MMF will have an impact on chronic allograft dysfunction; and the cost-effectiveness of treatment following the first year of transplantation.