The problem of activation of cyclophosphamide (CY) for an in vitro chemosensitivity assay was studied using the B16 melanoma. The efficacy of the S9 hepatic microsomal fraction in vitro was compared with activation by passage of drug in vivo. The effect of CY was assayed by inhibition of tritiated thymidine (3HdThd) uptake by B16 tumor cells in vitro, and by its effect in single dose in vivo on the life span of syngeneic C57BL/6 mice injected with B16 tumor cells. In vivo activation of CY that was achieved by injecting 20 mg of CY intraperitoneally (i.p.) into mice and obtaining plasma 20 minutes later was more rapid and more reproducible, while in vitro activation provided a more potent preparation and a better quantitative correlation with the in vivo effect of CY. The activation activity of different preparations of S9 microsomal fractions was found to be directly related to the activity of aminopyrine demethylase, a mixed function oxidase enzyme, in the S9 fraction, rather than to total protein concentration. The S9-activated drug required 2 1/2 to 3 hours to achieve maximum inhibition of subsequent tumor cell tritiated thymidine (3HdThd) incorporation compared with 20 minutes to achieve maximum inhibition by in vivo activated drug. We conclude that rapid qualitative screening for effectiveness of CY may best be done with in vivo activated drug, whereas quantitative prediction of effective concentration appears to be best achieved with drug activated in vitro by the hepatic S9 fraction.