Since cyclosporine was first reported to improve psoriasis, investigators have been trying to determine its mechanism of action. In addition to the well-documented effects on cytokine production by T lymphocytes, a direct effect on keratinocytes has been proposed. Cyclophilin and calmodulin, two proteins that are present in both lymphocytes and keratinocytes, have been considered as possible intracellular targets for cyclosporine. Cyclophilin binds cyclosporine with high affinity and the ability to bind cyclophilin correlates with the immunosuppressive effects of cyclosporine analogs. Cyclophilin is identical to peptidyl-prolyl cis-trans isomerase, an enzyme that catalyzes refolding of proteins. The process of protein folding may be important in DNA-protein and protein-protein interactions. Calmodulin is an intracellular calcium-binding protein that is important in the regulation of cell proliferation. Cyclosporine binds to calmodulin with low affinity, and such binding of cyclosporine isomers does not reflect their immunosuppressive activity. The physiologic importance of calmodulin-to-cyclosporine binding is controversial.