The reaction of 4-hydroxycyclophosphamide (4-hydroxy-CP) with sulfhydryl (SH) compounds was studied, and although the cytotoxic activity was lost a significant stabilization of the alkylating capacity was observed at the same time. We were able to show that the reaction of 4-hydroxy-CP with thiols lead to an equilibrium between the reaction product and the starting substrates. On the basis of this equilibrium the increased stabilization of the alkylating capacity of the 4-hydroxy-CP derivatives by raising the SH concentration can be explained. The different degrees of stabilization depending on the structure of the thiol results from different equilibria. the effect on the toxification reaction resulting from this equilibrium, in connection with the tautomeric equilibrium between 4-hydroxy-CP and aldophosphamide, is discussed.