The pharmacokinetics and the mechanism of action of the antihyperlipaemic compound 2-chloromethyl-5,6,7,8-tetrahydrobenzo(b)thieno[2,3-d]pyrimidin-4(3H)-on e (CAS 89587-03-3, LM-1554) have been studied. Serum concentrations were determined by reverse phase HPLC using methanol : water (60 : 40) as the solvent system. The results of pharmacokinetic studies suggest that the compound LM-1554 is poorly absorbed from the gastrointestinal tract after the oral administration in dogs and rabbits. The volume of distribution (Vd) was found to be low. The poor bioavailability (3-4%) and low volume of distribution of the compound LM-1554 suggest the gastrointestinal tract as the site of action for the antihyperlipaemic activity. This hypothesis is substantiated by the observations that the compound was found active in rabbits only when administered orally and found inactive by the parenteral route. Further, the cholesterol levels were found to increase in blood samples collected from the portal vein after oral administration of cholesterol in coconut oil to rats. This increase was found to be prevented by the compound LM-1554. In conclusion, the compound LM-1554 has a potential to be developed as an antihyperlipaemic agent. The mechanism of action of the compound LM-1554 appears to consist in the inhibition of cholesterol absorption in the gastrointestinal tract.