Most malignant tumors of the central nervous system do not respond well to chemotherapy. The anticancer drug cyclophosphamide (CPA) is largely ineffective against these neoplasms as its conversion to DNA-alkylating, cytotoxic metabolites is restricted primarily to the liver and these metabolites do not readily cross the blood-brain barrier. Here, we show that brain tumor cells can be sensitized to the cytotoxic effects of CPA, both in culture and in vivo, by introduction of the hepatic enzyme responsible for the activation of CPA, cytochrome P450 2B1. Stable transfection of rat C6 glioma cells with the P450 2B1 gene rendered the cultured tumor cells sensitive to CPA. Further, C6 cells bearing this gene were more sensitive than parental cells to the cytotoxic action of CPA when grown subcutaneously in the flanks of athymic mice. Murine fibroblasts producing a retrovirus vector encoding P450 2B1 and expressing this enzyme were then prepared and grafted into the brains of athymic mice seeded with rat C6 gliomas. Intrathecal administration of CPA prevented the development of meningeal neoplasia and led to partial regression of the parenchymal tumor mass. By contrast, C6 glioma-bearing mice receiving fibroblasts expressing the Escherichia coli lacZ gene and CPA exhibited extensive meningeal tumors and parenchymal solid brain tumors. The in situ activation of CPA by cytochrome P450 2B1 provides a novel approach not only for brain tumor gene therapy, but also for negative, drug-conditional selection of other defined cell populations.