The clinical activity of leflunomide, a drug used in the treatment of rheumatoid arthritis, is due to its active metabolite, teriflunomide. In vitro studies indicate that at least 99% of teriflunomide is expected to be protein bound in human plasma in vivo, leaving <1% in the unbound or 'free' state for clinical activity. To examine details of the relationships between leflunomide dosing and patient response, it is necessary to have an assay that is sufficiently sensitive to measure the minor fraction of free teriflunomide in patient samples. Therefore, we aimed to develop and validate an LC-MS/MS method for the measurement of teriflunomide, and use it to determine the total and free teriflunomide concentration in patients with rheumatoid arthritis. Teriflunomide and its deuterated internal standard were extracted from human plasma and separated using a reversed phase method with a C18 column. Detection was conducted with an API 3000 LC-MS/MS System by monitoring selected ions in negative ion MRM. Optimal detection occurred at m/z 269.1/160.0 (teriflunomide) and m/z 273.1/164.0 (teriflunomide-D4). Over a linear range of 5-500μg/L, the inter-batch precision ranged from 1.9 to 8.8% and accuracy from -8.4 to 8.0%. The intra- and inter-batch assay precision for quality control samples ranged from 2.1-5.4% and 5.7-7.1% respectively. The procedure was applied to assess total and free plasma concentrations of teriflunomide in patients with rheumatoid arthritis. Free teriflunomide was approximately 0.11% of total teriflunomide, and there was a significant correlation (r2=0.724) between free and total teriflunomide concentrations. A validated, accurate and sensitive method was developed and successfully applied for the measurement of total and free teriflunomide concentration in human plasma samples. This method has been shown to be reproducible and sensitive and can be applied to clinical samples.