The immunosuppressive metabolite of leflunomide, A77 1726, inhibits the enzymatic activity of protein tyrosine kinases and of dihydro-orotic acid dehydrogenase, an enzyme involved in pyrimidine biosynthesis. Here murine CTLL cell lines were studied to determine which of the biochemical targets of A77 1726 was responsible for the observed inhibition of proliferation and cytotoxic activity. At low concentrations of A77 1726, pyrimidine biosynthesis is the target, since inhibition of proliferation correlates with a reduction in pyrimidine NTP levels and is reversed by uridine. At higher concentrations of A77 1726, uridine no longer reverses the inhibition of proliferation even though pyrimidine NTP levels are restored. This second mechanism for inhibiting proliferation is probably inhibition of protein tyrosine kinases, since these higher concentrations of A77 1726 inhibit IL-2-induced tyrosine phosphorylation of Jak1 and Jak3, the protein tyrosine kinases initiating signaling by the IL-2R. Tyrosine phosphorylation of the beta-chain of the IL-2R, which is required for IL-2-driven proliferation, is also inhibited by A77 1726. Cytotoxicity of a CTLL line that overexpresses the Lck protein tyrosine kinase is inhibited by A77 1726; this inhibition is not affected by uridine, but does correlate with inhibition of an Lck in vitro kinase reaction. These studies establish that inhibition of pyrimidine biosynthesis and that of protein tyrosine kinase both contribute to the effects of A77 1726 on CTLL cell lines.