3-Methoxy-N,N'-diaminophthalamide was observed to be a potent hypolipidemic agent in rodents. Serum cholesterol and triglyceride levels in rats were significantly reduced as were lipid contents of the liver, small intestine, and aorta wall. VLDL and LDL cholesterol levels were significantly reduced. Unfortunately, HDL cholesterol levels were also markedly reduced. Furthermore, acute toxicity studies showed that the compound caused marked increases in serum CP kinase activity with doses of 40 and 100 mg/kg/day in mice. This is not a property of the 2,3-dihydrophthalazine-1,4-dione, the resultant product of the N,N'-diaminophthalamides. Apparently, closing the ring results in a safer compound with elevations in HDL cholesterol levels, a desirable characteristic in effective hypolipidemic agents.