Diclofenac, a nonsteroidal antiinflammatory drug, is known to be metabolized to chemically reactive intermediates that transacylate GSH forming diclofenac-S-acyl-glutathione (D-SG) in vivo in rat and in vitro in rat and human hepatocytes. Recently, it was reported that the treatment of rats with diclofenac led to a substantial decrease in the activity of hepatic gamma-glutamyltranspeptidase (gamma-GT), an extracellular canalicular membrane enzyme. Because studies have indicated that D-SG is a chemically reactive transacylating species that is excreted into rat bile, we propose that D-SG formed in the liver may be a substrate for, and potential inhibitor of, hepatic gamma-GT. The present experiments were performed to investigate the ability of D-SG to be a substrate for gamma-GT in vivo in rat and in vitro with commercially available gamma-GT enzyme. We also examined the ability of D-SG to inhibit gamma-GT in vitro. Thus, LC-MS/MS analysis of bile extracts from diclofenac-dosed rats (200 mg/kg, iv) showed the presence of the gamma-GT-mediated D-SG degradation product diclofenac-N-acyl-cysteinylglycine (D- N-CG), where a total of approximately 8 microg was excreted 6 h postadministration. When D-SG (100 microM) was incubated with gamma-GT (1 unit/mL), the GSH adduct was degraded in a linear time-dependent fashion where approximately 94 microM D- N-CG was formed after 20 min of incubation. Dialysis studies showed that inhibition of gamma-GT by D-SG was completely reversible. Further inhibition studies showed that D-SG is a competitive inhibitor of the gamma-GT enzyme. Results from theses studies indicate that D-SG is a substrate for gamma-GT; however, the conjugate may not contribute significantly to the decrease in gamma-GT activity reported to occur in vivo in rat.