Leflunomide (Arava(trade mark), Hoescht Marion Roussel, now Aventis Pharma) is a new, oral disease modifying antirheumatic drug (DMARD) for the treatment of active rheumatoid arthritis (RA). It is a novel isoxazole derivative, which has shown both anti-inflammatory and immunomodulatory properties. Leflunomide primarily acts by inhibiting the de novo synthesis of pyrimidine nucleotides (and consequently DNA and RNA) in immune response cells, particularly activated T-cells. It also inhibits tyrosine kinases, with a subsequent reduction in the pro-inflammatory cytokines, TNF and IL-1. Leflunomide is significantly more effective than placebo and equivalent to sulfasalazine and methotrexate in short-term (26 - 52 week) studies, as measured by American College of Rheumatology (ACR) criteria. It has shown significant improvements in functional disability and health related quality of life and has consistently been shown to slow radiographic progression of RA. Leflunomide has a rapid onset of action (within 4 weeks) which is significantly faster than placebo and sulfasalazine. Leflunomide was well-tolerated in clinical trials with no serious adverse effects occurring. The most common side effects were gastrointestinal disturbances, reversible alopecia, rash, hypertension and abnormal liver function tests. Most of these were mild to moderate and resolved without any complications. In summary leflunomide is an effective and well-tolerated DMARD that is a welcome addition to the currently available DMARDs for the treatment of this disabling condition.