Aim: Leflunomide is an immunosuppressive agent marketed as a disease-modifying antirheumatic drug. But it causes severe side effects, including fatal hepatitis and liver failure. In this study we investigated the contributions of hepatic metabolism and transport of leflunomide and its major metabolite teriflunomide to leflunomide induced hepatotoxicity in vitro and in vivo. Methods: The metabolism and toxicity of leflunomide and teriflunomide were evaluated in primary rat hepatocytes in vitro. Hepatic cytochrome P450 reductase null (HRN) mice were used to examine the PK profiling and hepatotoxicity of leflunomide in vivo. The expression and function of sodium/bile acid cotransporter (NTCP) were assessed in rat and human hepatocytes and NTCP-transfected HEK293 cells. After Male Sprague-Dawley (SD) rats were administered teriflunomide (1,6, 12 mg • kg, ig) for 4 weeks, their blood samples were analyzed. Results: A nonspecific CYPs inhibitor aminobenzotriazole (ABT, 1 mmol/L) decreased the IC 50 value of leflunomide in rat hepatocytes from 409 to 216 μmol/L, whereas another nonspecific CYPs inhibitor proadifen (SKF, 30 μmol/L) increased the cellular accumulation of leflunomide to 3.68-fold at 4 h. After oral dosing (15 mg/kg), the plasma exposure (AUC 0-t ) of leflunomide increased to 3-fold in HRN mice compared with wild type mice. Administration of leflunomide (25 mg • kg -1 • d -1 ) for 7 d significantly increased serum ALT and AST levels in HRN mice; when the dose was increased to 50 mg • kg, all HRN mice died on d 6. Teriflunomide significantly decreased the expression of NTCP in human hepatocytes, as well as the function of NTCP in rat hepatocytes and NTCP-transfected HEK293 cells. Four-week administration of teriflunomide significantly increased serum total bilirubin and direct bilirubin levels in female rats, but not in male rats. Conclusion: Hepatic CYPs play a critical role in detoxification process of leflunomide, whereas the major metabolite teriflunomide suppresses the expression and function of NTCP, leading to potential cholestasis.