Fazarabine has shown activity in the panel of 60 cultured human tumor lines of the National Cancer Institute. COMPARE analyses relating correlation coefficients of other anticancer drugs with those of fazarabine suggest that this agent operates through a similar mode of action to that of cytarabine. Studies have been carried out both in culture and in vivo to examine the mechanism of action of fazarabine in P388 murine and Molt-4 human lymphoblasts. Authentic fazarabine nucleotide standards were prepared by chemical and enzymatic methods and characterized on HPLC by comparison to related pyrimidine nucleoside-5'-phosphates as well as by enzymatic digestion. Fazarabine inhibited the incorporation of labeled thymidine into DNA without influencing the synthesis of RNA or protein. Deoxycytidine overcomes this inhibition of DNA synthesis and also prevents the cytotoxicity of the drug to lymphoblasts, probably by competing for fazarabine uptake and metabolism. Fazarabine was rapidly phosphorylated in both cell lines; in P388 cells it was incorporated into DNA, where it continued to undergo the same type of ring opening and degradation as the free nucleoside. Alkaline elution studies demonstrated that exposure to the agent resulted in the formation of alkaline labile sites. Fazarabine also inhibited the methylation of deoxycytidine residues in DNA, but this effect was less pronounced than that produced by 5-azacytidine. Taken together, these studies suggest that fazarabine probably acts by arresting the synthesis and/or altering the structural integrity or functional competence of DNA.