ABT-770 [(S)-N-[1-[[4'-trifluoromethoxy-[1,1'-biphenyl]-4-yl]oxy]methyl-2-(4,4-dimethyl-2,5-dioxo-1-imidazolidinyl)ethyl]-N-hydroxyformamide], a matrix metalloproteinase inhibitor (MMPI), produced generalized phospholipidosis in rats. Phospholipid accumulation was accompanied by retention of drug-related material and was associated with increased mortality. Generation of a successful drug candidate depended upon understanding the cause of the phospholipidosis and redesigning the chemical structure accordingly. ABT-770 and other MMPIs, plus several metabolites of each, were assayed for their ability to induce phospholipidosis in primary cultured rat and human hepatocytes. Phospholipid accumulation was detected by following the incorporation of a fluorescent phospholipid analogue into intracytoplasmic inclusion bodies characteristic of phospholipid storage disorders. At 24 and 48 hr, none of the parent compounds induced phospholipidosis in vitro in rat or human hepatocytes. Phospholipidosis was associated primarily with an amine metabolite of ABT-770. The amine metabolite of another MMPI, ABT-518 ([S-(R*,R*)]-N-[1-(2,2-dimethyl-1,3-dioxol-4-yl)-2-[[4-[4-(trifluoromethoxy)-phenoxy]phenyl]sulfonyl]ethyl]-N-hydroxyformamide), produced little phospholipidosis in rat and human hepatocytes even at concentrations up to 100 microM. The presence or absence of phospholipidosis in the in vitro assay correlated well with ultrastructural findings and drug accumulation in rat tissues. ABT-770, which produced phospholipidosis associated with its amine metabolite in vitro and in vivo, also generated a higher tissue to plasma distribution of metabolites particularly in tissues where phospholipidosis was observed. ABT-518 and its amine metabolite, however, produced low tissue to plasma ratios and induced little to no phospholipidosis in vitro or in vivo. These results demonstrate that the phospholipidosis observed for ABT-770 could be attributed to a cationic metabolite, and that altering the properties of such a metabolite, by modification of the parent compound, alleviated the disorder.