Immunosuppressive drugs have been used for the prevention of organ transplant rejection and to some extent for the treatment of severe autoimmune disease for many years. Cyclosporin A (CsA) has dose-limiting liabilities including renal toxicity, hypertension, hirsutism, and tremors. Tacrolimus (FK-506), a more potent macrolactone immunosuppressant, has significant neurologic side effects. To develop a better-tolerated immunosuppressant, we targeted the macrocyclic lactone ascomycin (FK-520) and modified its C-32 hydroxyl group via glycosylation with triacetyl-L-rhamnose to obtain compound 1 (CP-123,369), a novel potent IL-2 biosynthesis inhibitor. The synthesis involved preparing triacetylglycosyl bromide from L-rhamnose, which was coupled to ascomycin using a silver-mediated glycosylation (17% overall yield, α anomer confirmed by NMR and X-ray crystallography). In vitro, compound 1 potently inhibits human T-lymphocyte proliferation (IC50 = 10.4 nM) and IL-2 production (IC50 = 11.0 nM), with potency similar to CsA and ~10-fold less than tacrolimus. In vivo, it showed oral activity in rat adjuvant arthritis (ED50: primary lesion 10.6 mg/kg, secondary lesion 2.3 mg/kg) and prevented rat heterotopic heart allograft rejection at 30 mg/kg. Importantly, 14-21 day rodent toxicology studies demonstrated compound 1 has a favorable therapeutic index (>10) relative to neurologic side effects (plasma drug concentration and dose), compared to tacrolimus (~2), with no toxicity at doses providing equal or greater immunosuppressive activity than tacrolimus.