Purpose To identify the maximum-tolerated dose (MTD) and to evaluate the antileukemic activity of tosedostat (formerly CHR-2797), an orally bioavailable aminopeptidase inhibitor. Patients and Methods In phase I, the MTD of once daily oral doses of tosedostat in hematologic malignancies was defined. In phase II, the therapeutic activity of the maximum-acceptable dose (MAD) of tosedostat was evaluated in elderly and/or relapsing patients with acute myeloid leukemia (AML) or myelodysplastic syndrome. Results In phase I, 16 patients were treated in four cohorts with tosedostat (60 mg to 180 mg) for 28 days. Three patients reported dose-limiting toxicities: two with reversible thrombocytopenia (> 75% reduction in platelet count) at 180 mg (MTD) and one with a Common Toxicity Criteria (CTC) grade 3 ALT elevation at 130 mg (MAD). In phase II, 41 patients were treated with 130 mg tosedostat. In phases I and II, the most common severe (CTC grades 3 to 5) adverse event was a reduction in the platelet count. Of the 51 AML patients in this study, seven reached complete marrow response (< 5% marrow blasts), with three achieving complete remission, and a further seven patients reaching a partial marrow response (between 5% and 15% marrow blasts). The overall response rate was therefore 27%. All responders were age > 60 years, and 79% had either relapsed or refractory AML. Conclusion This phase I/II study demonstrates that oral once daily dosing with 130 mg tosedostat is well tolerated and has significant antileukemic activity. The favorable risk-benefit profile suggests that further clinical trials are warranted.