Metabolic studies in humans have demonstrated that 3'-azido-3'-deoxythymidine (AZT) is primarily eliminated as its 5'-O-glucuronide (GAZT). However, no detailed cellular metabolic studies have been reported on the complete catabolic fate of AZT at the hepatic site. Because the liver is probably the major site of AZT catabolism, the metabolism and transmembrane distribution of AZT were evaluated in freshly isolated rat hepatocytes, a model for the study at the cellular level of biosynthetic, catabolic, and transport phenomena in the liver. Following exposure of cells to 10 microM [3H]AZT, the predominant intracellular catabolite was GAZT, which reached a concentration of approximately 22 microM by 60 min. Additionally, under nonreducing conditions substantial levels of two previously unidentified AZT catabolites that were formed at the hepatic site and were distinct from any known anabolites or catabolites were also detected. These catabolites were identified as 3'-amino-3'-deoxythymidine (AMT) by fast atom bombardment mass spectrometry and 3'-amino-3'-deoxythymidine glucuronide (GAMT) through specific enzymatic hydrolysis. However, AMT was not a substrate for uridine 5'-diphosphoglucuronyltransferase and GAMT was found to be a reductive product of GAZT. Studies using rat and human liver microsomes demonstrated that the rate of formation of AMT and GAMT increased in the presence of NADPH, suggesting the involvement of a NADPH-dependent enzyme system. Studies using human hematopoietic progenitor cells demonstrated that AMT was 5- to 7-fold more toxic to human colony-forming units granulocyte-macrophage and burst-forming units erythroid than was AZT. This study provides the first detailed catabolic profile of AZT at the hepatic site and emphasizes the critical role that the liver plays in drug clearance. Formation of AMT, a highly toxic catabolite of AZT, raises a question regarding the role of AMT in the cytotoxic effects of AZT observed in patients.