Tacrolimus hydrate (FK506), a novel 23-membered macrolide, is an immunosuppressant isolated from Streptomyces tsukubaensis using extensive screening of fermentation products to identify a compound inhibiting the mixed lymphocyte reaction (MLR). The in vitro and in vivo immunosuppressive activities of FK506 were found to be more potent than those of cyclosporine (CyA). The superior immunosuppression with FK506 treatment was also confirmed in the skin allograft model in rats and liver transplantation in dogs. Clinical studies were initiated by Prof. Starzl at the University of Pittsburgh in 1989, and he demonstrated that FK506 surpassed CyA in the incidence of graft survival and the frequency of graft rejection. Multicenter randomized clinical studies, comparing FK506 to CyA corroborated the efficacy of FK506 on the survival of patients and of grafts, and especially on the appearance of severe refractory graft rejection. FK506 was marketed in 1993 in Japan, and was followed in 1994 in the U.S.A., U.K. and Germany. The mechanism of action of this compound was clarified by the endeavors of Prof. Schreiber, who demonstrated the existence of a binding protein for FK506 called FKBP, similar to cyclophilin for CyA. The FK506/FKBP complex binds with calcineurin, a serine/threonine phosphatase to inhibit the translocation of NFAT into the nucleus, resulting in inhibition of transcription of IL-2 mRNA. FK506 displays potent immunosuppressant activity, and contributes not only to the progress of transplantation therapy for clinical studies, but also to the clarification of signal transduction in T cell activation for basic science.