A subline of H35 hepatoma cells has been developed which exhibits 80-fold resistance to 5,10-dideazatetrahydrofolate, an antifolate which inhibits glycinamideribonucleotide transformylase. The cells are cross-resistant to methotrexate, an inhibitor of dihydrofolate reductase and 10-propargyl-5,8-dideazafolate and its 2-desamino-2-methyl derivative, both inhibitors of thymidylate synthase. The resistant cells are characterized by an impaired activity of the reduced folate transport system which affects cellular import of methotrexate, 5,10-dideazatetrahydrofolate, and 2-desamino-2-methyl-10-propargyl-5,8-dideazafolate but not 10-propargyl-5,8-dideazafolate. In addition, the resistant cells exhibit a severalfold increased activity of gamma-glutamyl hydrolase, the enzyme which cleaves the intracellular polyglutamate derivatives of the antifolates. Evidence for the involvement of gamma-glutamyl hydrolase in resistance is derived from the observation that polyglutamate derivatives of 10-propargyl-5,8-dideazafolate in resistant cells are maintained at one-third the amount of that in parental cells in the presence of the same extracellular concentration. This is the first observation that an increase in gamma-glutamyl hydrolase contributes to acquired resistance to antifolates.