3'-Azido-3'-deoxythymidine (AZT) is currently under clinical investigation to assess its potential to inhibit maternal-fetal HIV transmission. To determine the activation of AZT to its phosphorylated metabolites by placental cells, we characterized the intracellular phosphorylation of AZT in two major cell types of the placenta, namely trophoblasts and Hofbauer cells. Although phosphorylation of AZT in trophoblast and Hofbauer cells is 50- to 100-fold lower than that in human lymphocytic cell lines or activated lymphocytes, both cell types are capable of activating AZT to AZT triphosphate (AZTTP) at a level comparable to that of resting lymphocytes. We found that AZT monophosphate (AZTMP) was the major phosphorylated AZT metabolite, while AZT diphosphate (AZTDP) and AZTTP constituted less than 4% of the intracellular phosphorylated AZT pool. This result was independent of AZT concentration and exposure time in both types of placental cells. The rate-limiting step in the conversion of AZT to AZTTP was determined to be thymidylate kinase-catalyzed conversion of AZTMP to AZTDP. Trophoblasts and Hofbauer cells exhibited different time-course and concentration-dependent profiles of intracellular AZT phosphorylation, suggesting that these two placental cells may have anabolic or catabolic enzymes of different composition or efficiency. AZTTP decayed in both trophoblasts and Hofbauer cells with a half-life of 4-6 hr. These results should be useful in rationally designing AZT dosage regimens to treat HIV-infected women for prevention of maternal-fetal HIV transmission.