4-Hydroperoxycyclophosphamide was obtained in approximately 20% yield by ozonization of cyclophosphamide in acetone/water at 0 degrees C. It was reduced to 4-hydroxycyclophosphamide, which was treated with several mercaptans to yield compounds of the type 4-(S-R)-mercapto-cyclophosphamide. In the solid state these compounds are stable at room temperature; in aqueous solution they are hydrolyzed to 4-hydroxycyclophosphamide or its tautomer, aldophosphamide. One of the 4-(S-R)-mercapto-cyclophosphamide compounds was tested biologically in vitro against Yoshida ascites tumor cells and showed the same cytotoxic activity as 4-hydroxycyclophosphamide.