Chronic rejection, characterized by a progressive obliterative arteriopathy, is a major cause of graft failure in long-surviving human transplants for which there is no effective treatment. Leflunomide, an isoxazol derivative, has been shown to be a novel immunomodulatory drug that profoundly suppresses the immune response. In this study, 58 Fisher-344 rats received cardiac transplantation from Lewis rats. All the recipients were given CsA at 2.5 mg/kg for 5 days postoperatively. Without further treatments, the arterial intima was progressively injured by mononuclear cell infiltration and Ab deposition. Smooth muscle cell and fibroblast proliferation in the intima became a predominant phenomenon by day 90. CsA was ineffective in controlling the progress of arterial intimal thickening when treatment began on day 30. Leflunomide at 5 mg/kg failed to control arterial intimal thickening by day 60 when therapy began on day 30. However, the progress of arterial intimal thickening was significantly inhibited by day 90 when the dosage of leflunomide had been increased to 10 mg/kg on day 60. Combined therapy with leflunomide and CsA at 5 mg/kg for 30 days dramatically reversed the arterial thickening by day 60. After increasing the dosages of both leflunomide and CsA to 10 mg/kg on day 60, the combination therapy steadily controlled the chronic rejection. Only the combination therapy significantly down-regulated circulating antidonor IgM and IgG titers. In rat smooth muscle cell culture, this same drug combination had a synergistic inhibitory effect on proliferation. Therefore, the combination therapy of leflunomide and CsA could reverse and control the progress of chronic rejection, while leflunomide, at higher dosage as a monotherapy, could stabilize chronic rejection in this model. The mechanism of the regression of chronic rejection by leflunomide and cyclosporine may be related to their in vitro abilities to control not only lymphocyte but smooth muscle cell proliferation, as well. The synergistic effect of these two drugs on vascular smooth muscle cell proliferation in vitro may be an important part of this novel activity. This unique feature holds intriguing possibilities for treating established chronic rejection.