BACKGROUND Tacrolimus (FK506) is an immunosuppressive drug 50-100 times more potent than cyclosporine (CsA), the current mainstay of organ transplant rejection therapy. Despite being chemically unrelated, CsA and tacrolimus exert their immunosuppressive effects through the inhibition of calcineurin (CaN), a critical signaling molecule during T-lymphocyte activation. Although numerous clinical studies have proven the therapeutic efficacy of drugs within this class, tacrolimus and CsA also have a strikingly similar profile of unwanted side effects. METHODS Our objective has been to identify a less toxic immunosuppressant through the modification of ascomycin (FK520). Quantitative in vitro immunosuppression and toxicity assays have demonstrated (see the accompanying article, p. 18) that we achieved our goal with L-732,531 (indolyl-ascomycin; indolyl-ASC), a 32-O-(1-hydroxyethylindol-5-yl) ascomycin derivative with an improved therapeutic index relative to tacrolimus. RESULTS We report that the attributes of indolyl-ASC may result from its distinctive biochemical properties. In contrast to tacrolimus, indolyl-ASC binds poorly to FK506 binding protein 12 (FKBP12), the major cytosolic receptor for tacrolimus and related compounds. However, the stability of the interaction between the FKBP12-indolyl-ASC complex and CaN is much greater than that of the FKBP12-tacrolimus complex. These distinguishing properties of indolyl-ASC result in the potent inhibition of CaN within T lymphocytes but may lower the accumulation of the drug at sites of toxicity. CONCLUSIONS Indolyl-ASC may define those properties needed to increase the therapeutic efficacy of a macrolactam immunoregulant for treating both human autoimmune disease and organ transplant rejection.