The efficacy of targeted therapeutics such as immunotoxins is directly related to both the extent of distribution achievable and the degree of drug internalization by individual cells in the tissue of interest. The factors that influence the tissue distribution of such drugs include drug transport; receptor/drug binding; and cellular pharmacology, the processing and routing of the drug within cells. To examine the importance of cellular pharmacology, previously treated only superficially, we have developed a mathematical model for drug transport in tissues that includes drug and receptor internalization, recycling, and degradation, as well as drug diffusion in the extracellular space and binding to cell surface receptors. We have applied this "cellular pharmacology model" to a model drug/cell system, specifically, transferrin and the well-defined transferrin cycle in CHO cells. We compare simulation results to models with extracellular diffusion only or diffusion with binding to cell surface receptors and present a parameter sensitivity analysis. The comparison of models illustrates that inclusion of intracellular trafficking significantly increases the total transferrin concentration throughout much of the tissue while decreasing the penetration depth. Increasing receptor affinity or tissue receptor density reduces permeation of extracellular drug while increasing the peak value of the intracellular drug concentration, resulting in "internal trapping" of transferrin near the source; this could account for heterogeneity of drug distributions observed in experimental systems. Other results indicate that the degree of drug internalization is not predicted by the total drug profile. Hence, when intracellular drug is required for a therapeutic effect, the optimal treatment may not result from conditions that produce the maximal total drug distribution. Examination of models that include cellular pharmacology may help guide rational drug design and provide useful information for whole body pharmacokinetic studies.