The effect of chloroquine on phagocytosis and leucocyte ultrastructure has been examined. Incubation of neutrophils in 50 micrograms/ml chloroquine for 15 minutes produced a significant inhibition of latex particle uptake. After 90 minutes both 50 and 5 micrograms/ml inhibited phagocytosis while 7 of 9 cases were also inhibited at 0.5 micrograms/ml. However, after 4 hours 50 micrograms/ml chloroquine caused neutrophil granule vacuolation and a massive increase in autophagosomes in other cell types. Incubation in 5 to 0.05 micrograms/ml, which includes therapeutic plasma levels, had no effect on neutrophil ultrastructure but produced a dose-related increase in the number of lymphocytes containing autophagosomes, reflecting altered lysosomal function. As the antimalarial effect of chloroquine is manifested by giant autophagosome formation in Plasmodium, a common antirheumatic and antimalarial mechanism of action is postulated.