Cyclophosphamide remains one of the most successful and widely utilized antineoplastic drugs. Moreover, it is also a potent immunosuppressive agent and the most commonly used drug in blood and marrow transplantation (BMT). It was initially synthesized to selectively target cancer cells, although the hypothesized mechanism of tumor specificity (activation by cancer cell phosphamidases) transpired to be irrelevant to its activity. Nevertheless, cyclophosphamide's unique metabolism and inactivation by aldehyde dehydrogenase is responsible for its distinct cytotoxic properties. Differential cellular expression of aldehyde dehydrogenase has an effect on the anticancer therapeutic index and immunosuppressive properties of cyclophosphamide. This Review highlights the chemistry, pharmacology, clinical toxic effects and current clinical applications of cyclophosphamide in cancer and autoimmune disorders. We also discuss the development of high-dose cyclophosphamide for BMT and the treatment of autoimmune diseases.