Hydralazine is associated with a lupus-like syndrome. There is evidence that many drug hypersensitivity reactions are due to reactive metabolites. Incubation of hydralazine with activated neutrophils or monocytes led to the production of phthalazinone, phthalazine and 3 unidentified metabolites. Formation of the metabolites, with the exception of phthalazine, required activation of the leukocytes. Using radiolabelled hydralazine, covalent binding to activated neutrophils was observed. Oxidation of hydralazine catalyzed by myeloperoxidase (MPO) produced the same metabolites and covalent binding to protein. We conclude that hydralazine is metabolized by activated leukocytes to a reactive metabolite which may be associated with hydralazine induced lupus.