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The fungus metabolite cyclosporin A is a small peptide acting as a novel antilymphocytic agent. It strongly depressed appearance of both direct and indirect plaque-forming cells and produced a clear dose-dependent inhibition of haemagglutinin formation in mice upon oral administration. Skin graft rejection in mice and graft-versus-host disease in mice and rats were considerably delayed by cyclosporin A which also prevented the occurrence of paralysis in rats with experimental allergic encephalomyelitis. This compound was not only highly effective in preventing development of Freund's adjuvant arthritis, but in addition improved the symptoms in rats with established arthritis, although it is inactive in acute inflammation. This new agent contrasts with other immunosuppressives and cytostatic drugs in its weak myelotoxicity. Experimental evidence suggests that cyclosporin A, rather than being cytostatic or lympholytic, affects an early stage of mitogenic triggering of the immunocompetent lymphoid cell.