A pharmacodynamic approach was employed to examine the diuretic effect of chlorthalidone in beagle dogs and to identify parameters necessary for optimization of an oral dosage formulation of this drug. The extensive partitioning of chlorthalidone into erythrocytes was shown to be noninstantaneous, with an in vitro partitioning half-life of 18 min. In vivo studies using oral and intravenous solutions confirmed this finding. Additionally, the diuretic effect was demonstrated to be related to the drug concentration in the plasma fraction. These studies led to the development of a relevant pharmacokinetic model which highlighted the importance of the oral absorption rate on the diuretic efficacy of chlorthalidone. A novel, rapidly dissolving, stabilized, amorphous chlorthalidone tablet formulation was compared to various oral solution and tablet formulations. Pharmacokinetic analysis by classical compartmental models and by moment techniques demonstrated that the rapidly dissolving tablet formulation was bioequivalent to an oral solution of chlorthalidone. Preparations containing crystalline chlorthalidone are shown to be incompletely absorbed, and the rates of absorption favor partitioning into the erythrocyte fraction. It is projected from the pharmacodynamic model that the novel chlorthalidone preparation optimizes plasma levels necessary to invoke a diuretic response.