Nephrotoxicity is a limiting factor in the use of ifosfamide in children. Despite the co-administration of uroprotective agents such as sodium 2-mercaptoethanesulfonate (mesna), ifosfamide chemotherapy is associated with nephropathy characterized by glomerular toxicity and Fanconi syndrome in many children treated with this drug. This is in distinction to cyclophosphamide, an analogue which differs solely by the position of a chloroethyl group, and which is not associated with nephrotoxicity. We hypothesized that ifosfamide is metabolized by cytochrome P450 (CYP) enzymes located in the renal tubular cell to the toxic metabolite chloroacetaldehyde; and, that the higher production of chloroacetaldehyde from ifosfamide than from cyclophosphamide explains the clinical differences in nephrotoxicity. We found that in both pig renal cortical microsomes and whole human kidney microsomes incubated with 1 mM ifosfamide for 3 hr, 2 and 3 dechloroethylifosfamide (DCEI) were produced. Our study provides evidence that porcine and human kidney microsomes are capable of biotransforming ifosfamide to DCEI metabolites that are produced in equimolar amounts with chloroacetaldehyde, indicating that chloroacetaldehyde is locally produced by renal cells as a possible mechanism for nephrotoxicity.