In the past decade, fludarabine has had a major impact in increasing the effectiveness of treatment of patients with indolent B-cell malignancies. This has come about in a variety of clinical circumstances, including use of fludarabine alone as well as in combinations with DNA-damaging agents or membrane-targeted antibodies. Other strategies have used fludarabine to reduce immunological function, thus facilitating non-myeloablative stem cell transplants. Fludarabine is a prodrug that is converted to the free nucleoside 9-beta-D-arabinosyl-2-fluoroadenine (F-ara-A) which enters cells and accumulates mainly as the 5'-triphosphate, F-ara-ATP. The rate-limiting step in the formation of triphosphate is conversion of F-ara-A to its monophosphate, which is catalyzed by deoxycytidine kinase. Although F-ara-A is not a good substrate for this enzyme, the high specific activity of this protein results in efficient phosphorylation of F-ara-A in certain tissues. F-ara-ATP has multiple mechanisms of action, which are mostly directed toward DNA. These include inhibition of ribonucleotide reductase, incorporation into DNA resulting in repression of further DNA polymerisation, and inhibition of DNA ligase and DNA primase. Collectively these actions affect DNA synthesis, which is the major mechanism of F-ara-A-induced cytotoxicity. Secondarily, incorporation into RNA and inhibition of transcription has been shown in cell lines. With the standard dose of fludarabine (25 to 30 mg/m(2)/day given over 30 minutes for 5 days), plasma concentrations of about 3 micromol/L F-ara-A are achieved at the end of each infusion. Serial sampling of leukaemia cells from patients receiving these standard doses of fludarabine has demonstrated that the peak concentrations of F-ara-ATP are achieved 4 hours after start of fludarabine infusion. Although there is heterogeneity among individuals with respect to rate of F-ara-ATP accumulation, the peak concentrations are generally proportional to the dose of the drug. Knowledge of the plasma pharmacokinetics of its principal nucleoside metabolite F-ara-A, and the cellular pharmacology of the proximal active metabolite, F-ara-ATP, has provided some understanding of the activity of fludarabine when used as a single agent. Preclinical studies directed toward learning the mechanisms of action of this agent have formed the basis for several mechanism-based strategies for its combination and scheduling with other agents. As a single agent fludarabine has been effective for the indolent leukaemias. Biochemical modulation strategies resulted in enhanced accumulation of cytarabine triphosphate and led to the use of fludarabine for the treatment of acute leukaemias. Combination of fludarabine with DNA damaging agents to inhibit DNA repair processes has been highly effective for indolent leukaemias and lymphomas. The current review brings together knowledge of the mechanisms of fludarabine, the state of understanding of the plasma pharmacokinetics, and cellular pharmacodynamics of fludarabine nucleotides. This may be useful in the design of future therapeutic approaches.