Leflunomide (LFM) is a novel anti-inflammatory and immunosuppressive drug, and inhibits the growth of cytokine-stimulated lymphoid cells in vitro. The effect of LFM on haploid and diploid cells of Saccharomyces cerevisiae was investigated to elucidate the molecular mechanism of action of the drug. Using a halo assay, LFM was shown to enhance the cell cycle arrest of haploid cells induced by mating pheromone alpha-factor. LFM also inhibited sporulation of diploid cells completely. S. cerevisiae genes which were cloned to suppress the anti-proliferative effect when present in increased copy number were introduced and examined for their activity to suppress the effect of LFM. Out of them, MLF4/SSH4, was found to suppress the sporulation-inhibitory effect of LFM. However, MLF4 failed to suppress the enhancing effect of LFM on pheromone response. Thus, LFM is suggested to act on haploid and diploid cells by different mechanisms.