Application of a modified ePHOGSY and other NMR experiments to an H2O-DMSO solution of the protein FKBP12 identified the presence of one molecule of DMSO bound in the substrate binding site. It occupies the same spatial region occupied by the pipecolidine moiety of the immunosuppressive drugs FK506 and Rapamycin complexed to the protein. The binding constant K(D) for ths DMSO molecule was only 275 mM. A substructure search of small molecules similar to DMSO resulted in the identification of molecules with improved binding affinity. This work represents a clear example of the powerful interplay of molecular modelling and NMR.