2,3-Dihydrophthalazine-1,4-dione effectively lowers serum levels of cholesterol and triglycerides in Sprague Dawley rats after two weeks, after which the cholesterol levels continued to decline. The maximum serum lipid lowering effect on cholesterol or triglyceride levels was during the seventh and eighth week of drug administration. Similar magnitudes of reduction in lipids were observed in hyperlipidemic diet induced mice after four weeks of drug administration of 20 mg/kg.day. Lipid levels in liver, small intestines and aorta wall tissue were significantly reduced after eight weeks of drug administration, but no significant increase in fecal lipids was noted. The cholesterol content in the chylomicrons and in the VLDL and LDL-fractions was significantly reduced whereas HDL cholesterol was elevated by 112%. Neutral lipids and the triglyceride content were not altered in the chylomicron, VLDL and LDL; however, reductions of both levels were observed in the HDL fraction. The phospholipid content was reduced in the LDL and elevated in the other three fractions. Incorporation studies into lipoprotein fractions showed a decrease in cholesterol incorporation in chylomicrons, VLDL and LDL with an increase in HDL cholesterol incorporation. Palmitic acid incorporation was reduced in the chylomicron, VLDL and HDL fractions. 32P-Incorporation was reduced in the HDL fraction. Leucine incorporation into the apoproteins of all four fractions was elevated. Rate limiting enzymes involved in de novo cholesterol, fatty acid and triglyceride synthesis were inhibited by 2,3-dihydrophthalazine-1,4-dione after eight weeks of administration. There was no evidence that the drug caused an increase in peroxisome formation as measured by liver catalase activity nor the release of lysosomal hydrolytic enzymes as measured by acid phosphatase and cathepsin activities. The drug afforded no deleterious effects on clinical chemistry parameters after eight weeks administration.