Mycophenolate mofetil (MMF) is a novel immunosuppressive drug that shows promise in preventing the rejection of organ allografts and in the treatment of ongoing rejection. Orally administered MMF is hydrolyzed by esterases in the intestine and blood to release mycophenolic acid (MPA), a potent, selective, noncompetitive inhibitor of the type 2 isoform of inosine monophosphate dehydroxygenase (IMPDH) expressed in activated human T and B lymphocytes. By inhibiting IMPDH, MPA depletes the pool of dGTP required for DNA synthesis. MPA has a more potent cytostatic effect on lymphocytes than on other cell types, and this is the principal mechanism by which immunosuppressive activity is exerted. MPA also depletes pools of GTP in human lymphocytes and monocytes, thereby inhibiting the synthesis of fucose- and mannose-containing saccharide components of membrane glycoproteins. These are recognized by the family of adhesion molecules termed selectins. By this mechanism, MPA could decrease the recruitment of lymphocytes and monocytes into sites of graft rejection. In addition to preventing allograft rejection, MMF suppresses graft-versus-host reactions in lethal and nonlethal murine models. MMF inhibits primary antibody responses more efficiently than secondary responses. MPA inhibits the proliferation of human B lymphocytes transformed by Epstein-Barr virus and is not mutagenic. Clinically attainable concentrations of MPA suppress the proliferation of human arterial smooth muscle cells. These two properties of MPA may decrease the risk of lymphoma development and proliferative arteriopathy in long-term recipients of MMF.