To assess the safety and effectiveness of leflunomide versus placebo in patients with active rheumatoid arthritis (RA) treated for 6 months. Four hundred two patients were randomly assigned to receive placebo or leflunomide at 5 mg, 10 mg, or 25 mg daily. A washout period of 6-12 weeks from prior second-line therapy was required. Statistically significant improvement in primary and secondary outcome measures, as well as by responder analyses, occurred in the 10-mg and 25-mg dosage groups compared to placebo. Twenty-one patients (7.0%) in the active treatment groups withdrew due to adverse events (AEs). The incidence of AEs was higher with leflunomide than with placebo. Gastrointestinal symptoms, weight loss, allergic reactions, skin rash, and reversible alopecia were more common in the 10-mg and 25-mg dosage groups. The incidence of infections was similar between the treatment and placebo groups; no opportunistic infections were seen. Transient elevations in liver function studies were noted in a small number of patients. Leflunomide is effective in daily doses of 10 mg and 25 mg in patients with active RA. Improved efficacy at the 25-mg dose was associated with a higher incidence of AEs. Randomized, placebo-controlled trials using daily doses of 10 mg and 20 mg are under way in the US and Europe to confirm these positive results.