The structure of inosine-5′-monophosphate dehydrogenase (IMPDH) in complex with IMP and mycophenolic acid (MPA) has been determined by X-ray diffraction. IMPDH plays a central role in B and T lymphocyte replication. MPA is a potent IMPDH inhibitor and the active metabolite of an immunosuppressive drug recently approved for the treatment of allograft rejection. IMPDH comprises two domains: a core domain, which is an α/β barrel and contains the active site, and a flanking domain. The complex, in combination with mutagenesis and kinetic data, provides a structural basis for understanding the mechanism of IMPDH activity and indicates that MPA inhibits IMPDH by acting as a replacement for the nicotinamide portion of the nicotinamide adenine dinucleotide cofactor and a catalytic water molecule.