Leflunomide is a selective inhibitor of de novo pyrimidine synthesis. In phase II and III clinical trials of active rheumatoid arthritis, leflunomide was shown to improve primary and secondary outcome measures with a satisfactory safety profile. The active metabolite of leflunomide, A77 1726, at low, therapeutically applicable doses, reversibly inhibits dihydroorotate dehydrogenase (DHODH), the rate limiting step in the de novo synthesis of pyrimidines. Unlike other cells, activated lymphocytes expand their pyrimidine pool by approximately eightfold during proliferation; purine pools are increased only twofold. To meet this demand, lymphocytes must use both salvage and de novo synthesis pathways. Thus the inhibition of DHODH by A77 1726 prevents lymphocytes from accumulating sufficient pyrimidines to support DNA synthesis. At higher doses, A77 1726 inhibits tyrosine kinases responsible for early T cell and B cell signalling in the G₀/G₁ phase of the cell cycle. Because the immunoregulatory effects of A77 1726 occur at doses that inhibit DHODH but not tyrosine kinases, the interruption of de novo pyrimidine synthesis may be the primary mode of action. Recent evidence suggests that the observed anti-inflammatory effects of A77 1726 may relate to its ability to suppress interleukin 1 and tumour necrosis factor α selectively over their inhibitors in T lymphocyte/monocyte contact activation. A77 1726 has also been shown to suppress the activation of nuclear factor κB, a potent mediator of inflammation when stimulated by inflammatory agents. Continuing research indicates that A77 1726 may downregulate the glycosylation of adhesion molecules, effectively reducing cell-cell contact activation during inflammation.