The metabolism of cyclosporin A (CsA), a widely used immunosuppressive agent, was evaluated in freshly isolated rabbit hepatocytes by HPLC which separated CsA from its major group of derivatives, e.g. "first generation" metabolites (monohydroxylated and N-demethylated) and "second generation" derivatives (dihydroxylated and dihydroxy-N-demethylated). After exposure of hepatocytes to radiolabeled CsA (0.5 mg/liter), CsA was rapidly accumulated inside the cells and metabolized. The dihydroxylated metabolites represent the major intracellular forms after 1 hr. CsA metabolites synthesized inside the cells are then rapidly detected in the extracellular compartment. Unchanged drug and the various metabolites are concentrated inside the cells with transmembrane chemical gradients ranging between 20:1 and 40:1. Transport and metabolic processes for CsA have been evaluated over the following CsA extracellular concentration range, 0.1-10 mg/liter. Metabolism appears to be the rate-limiting step. The apparent affinity constant of CsA for the enzyme system involved in its metabolism is approximately 15 microM. Besides the lipophilicity of the molecule, which is responsible for the retention of CsA and its metabolites in the intracellular compartment, the presence of a binding component(s) in the hepatocytes was also demonstrated. CsA and its metabolites seem to have similar affinities for this binding site. These studies demonstrate that CsA is rapidly transformed inside the hepatocytes to various metabolites which may play an important role in the pharmacological activity of the drug and/or in its clinical toxicity.