Combination of disease-modifying antirheumatic drugs (DMARDs) is increasingly used in the treatment of rheumatoid arthritis (RA) patients. Hepatotoxicity has been an important safety concern with DMARDs therapy. Though leflunomide (CAS 75706-12-6) has emerged as an effective oral DMARD, its use is associated with hepatotoxicity. Limited data is available regarding hepatotoxic risk when leflunomide is used in combination therapy in RA patients. An open-label, prospective study was conducted to evaluate the hepatotoxic risk after addition of leflunomide with other DMARDs in RA patients, who did not respond to their ongoing DMARD therapy. A total of 46 patients were enrolled and leflunomide was given as add-on therapy with earlier DMARDs. Biochemical parameters of serum aminotransferase levels (AST and ALT) were estimated at the baseline and then every month after addition of leflunomide. Study results showed that 13.0% patients developed > 1.5 to < 2 times upper limit of normal (ULN) elevation; 6.5% patients developed > 2 to < 3 times the ULN elevation and 2.2% patients developed > 3 times the ULN elevation. In 20% of the patients with hepatic enzyme elevations, enzyme levels returned to normal within 4-6 weeks after discontinuation of leflunomide therapy, whereas in 50% of patients the dose of leflunomide was reduced from 20 mg/day to 10 mg/day for normalization of enzymes levels. 30% of patients were continued with leflunomide without dose reduction. None of the patients showed clinical signs and symptoms of hepatotoxicity. Leflunomide therapy with other DMARDs requires strict monitoring of serum aminotransferases.