The immunosuppressant drug rapamycin blocks progression of the cell cycle at the G1 phase in mammalian cells and yeast. Here we show that rapamycin inhibits cap‐dependent, but not cap‐independent, translation in NIH 3T3 cells. Cap‐dependent translation is also specifically reduced in extracts from rapamycin‐treated cells, as determined by in vitro translation experiments. This inhibition is causally related to the dephosphorylation and consequent activation of 4E‐BP1, a protein recently identified as a repressor of the cap‐binding protein, eIF‐4E, function. These effects of rapamycin are specific as FK506, a structural analogue of rapamycin, had no effect on either cap‐dependent translation or 4E‐BP1 phosphorylation. The rapamycin‐FK506 binding protein complex is the effector of the inhibition of 4E‐BP1 phosphorylation as excess of FK506 over rapamycin reversed the rapamycin‐mediated inhibition of 4E‐BP1 phosphorylation. Thus, inactivation of eIF‐4E is, at least in part, responsible for inhibition of cap‐dependent translation in rapamycin‐treated cells. Furthermore, these results suggest that 4E‐BP1 phosphorylation is mediated by the FRAP/TOR signalling pathway.