In this study, we used preactivated forms of cyclophosphamide (CP) and dechlorocyclophosphamide (deClCP) to examine the effects of phosphoramide mustard (PM) and acrolein, respectively, on the cell cycle of postimplantation rat embryos. The percentage distribution of cells in the G1/G0, S, and G2/M phases of the cell cycle was determined by flow-cytometric analysis. At embryotoxic concentrations, 4-OOH-CP (PM) induced major cell cycle perturbations whereas 4-OOH-deClCP (acrolein) caused no major perturbation of the cell cycle. These data support the hypothesis that the mechanism of the embryotoxic action of PM involves alkylation of DNA, whereas the mechanism of action of acrolein does not. The primary effect of PM on the cell cycle was an initial delay in the S phase followed by a G2/M arrest. At low embryotoxic concentrations of 4-OOH-CP, there was apparent reversal of the G2/M arrest; at higher embryotoxic concentrations there was little recovery from the G2/M arrest. The high level of cell death found at higher drug concentrations suggests that prolonged G2/M arrest leads to cell death. Using radiolabeled CP and cell sorting, it was determined that PM predominantly alkylated DNA in the S phase of the cell cycle. Overall, the data from this study support the hypothesis that DNA cross-links, induced by the alkylation of DNA by PM, induce cell cycle perturbations. Furthermore, these cell cycle alterations may be one of the early steps in the mechanism leading to the embryotoxicity of PM.