Cyclophosphamide has been in clinical use for the treatment of malignant disease for over 30 years. It remains one of the most useful anticancer agents, and is also widely used for its immunosuppressive properties. Cyclophosphamide is inactive until it undergoes hepatic transformation to form 4-hydroxycyclophosphamide, which then breaks down to form the ultimate alkylating agent, phosphoramide mustard. Sensitive and specific methods are now available for the measurement of cyclophosphamide, its metabolites and its stereoisomers in plasma and urine. The pharmacokinetics of cyclophosphamide have been understood for many years; those of the cytotoxic metabolites have been described more recently. The pharmacokinetics are not significantly altered in the presence of hepatic or renal insufficiency. As activity resides exclusively in the metabolites, whose pharmacokinetics are not predicted by those of the parent compound, correlations between cyclophosphamide pharmacokinetics and pharmacodynamics have not been demonstrated. Cyclophosphamide is used in doses that range from 1.5 to 60 mg/kg/day. A steep dose-response curve exists, and reductions in dose can lead to unfavourable outcomes. Myelosuppression is the dose-limiting toxicity, although in the setting of bone marrow transplantation, escalation beyond that dosage range is limited by cardiac toxicity. Longer term complications of cyclophosphamide therapy include infertility and an increased incidence of second malignancies. Cellular sensitivity to cyclophosphamide is a function of cellular thiol concentration, metabolism by aldehyde dehydrogenases to form inactive metabolites, and the ability of DNA to repair alkylated nucleotides. Whether alteration of these cellular functions will lead to further improvements in clinical outcomes is an area of active investigation.