Mycophenolic acid (MPA), administered orally to mice, inhibits the formation of antibodies to sheep erythrocytes. MPA also suppresses, in a dose-related manner, the generation of cytotoxic T-lymphocytes against allogeneic cells in mice and prevents the elimination of allogeneic cells. However, short-term of T lymphocytes with therapeutically attainable doses of MPA does not inhibit the effector phase of cytotoxicity. Doses of MPA sufficient to prevent allograft rejection in mice inhibit the incorporation of labelled thymidine into DNA in the lymph nodes and spleen of mice but not in the germinal cells of the testis or in the basal epithelial cells of the jejunum; they do not produce neutropenia, anaemia or thrombocytopenia. These observations show that MPA has lymphocyte-selective anti-proliferative effects in vivo and can inhibit both cell-mediated and humoral immune responses without major side effects. Reasons why MPA has advantages over currently used and recently identified immunosuppressive drugs are discussed. The experimental system described provides a convenient in vivo assay for the capacity of drugs to inhibit allograft rejection.