1. Measurements of the rate of lithium clearance, which provides an estimate of proximal renal tubular iso-osmotic reabsorption (i.e. sodium and H2O), were used to study H2O and electrolyte reabsorption during the development of cyclosporin A (CsA) induced nephrotoxicity. 2. CsA, administered daily by gavage at 50 mg/kg body weight, produced a nephrotoxicity which was characterized by reductions in the clearance rates of creatinine, sodium and potassium, and increased glycosuria, enzymuria and urine flow rate. 3. Decreased lithium clearance rate and increased proximal iso-osmotic reabsorption accompanied significant reductions in creatinine clearance rate. Absolute proximal tubular reabsorption, however, was not affected by CsA administration. 4. Reductions in the absolute distal tubular reabsorption of sodium, potassium and H2O were also observed. 5. Alterations in renal tubular function occur early in the development of CsA nephrotoxicity as a result of both direct proximal tubulotoxicity and an effect on the afferent arteriole. 6. Measurements of the rate of lithium clearance may be a useful adjunct to the diagnosis of CsA nephrotoxicity.