Mycophenolic acid (MPA), an inhibitor of inosine monophosphate dehydrogenase, in nanomolar concentrations blocks proliferative responses of cultured human, mouse and rat T lymphocytes and B lymphocytes to mitogens or in mixed lymphocyte reactions. The inhibitory effect of MPA on lymphocyte proliferation is reversed by addition to culture media of deoxyguanosine or guanosine but not by addition of deoxyadenosine or adenosine. The findings suggest that the principal mechanism of action of low concentrations of MPA is depletion of deoxyguanosine triphosphate which is required for DNA synthesis. In immunosuppressive doses, MPA does not affect the formation of IL‐1 by LPS‐activated human peripheral blood monocytes. Unlike cyclosporin A and FK‐506, MPA does not inhibit the formation of IL‐2 and the expression of the IL‐2 receptor in mitogen‐activated human T lymphocytes. MPA suppresses mixed lymphocyte reactions when added 3 days after their initiation. These findings suggest that MPA does not inhibit early responses of T and B lymphocytes lo mitogenic or antigenic stimulation but blocks the cells at the time of DNA synthesis. The cytostatic effect of MPA is more potent on lymphocytes than on other cell types, such as fibroblasts and endothelial cells. MPA also inhibits antibody formation by polyclonally activated human B lymphocytes. MPA is an immunosuppressive agent reversibly inhibiting proliferation of T and B lymphocytes and antibody formation, with a profile of activity different from that of other immunosuppressive drugs. Human T and B lymphocytic and promonocytic cell lines are highly sensitive to the antiproliferative effects of MPA, whereas the erythroid precursor cell line K562 is less susceptible. The effect of MPA on cells of the monocyte‐macrophage lineage could exert long‐acting anti‐inflammatory activity. MPA or analogues may have therapeutic utility in diseases such as rheumatoid arthritis, for prevention of allograft rejection and in lymphocytic or monocytic leukaemias and lymphomas.