Possible segmental differences in drug permeability as well as esterase and ketone reductase activities in the albino rabbit intestine were investigated. Beta adrenergic antagonists and timolol prodrugs spanning four orders of magnitude in distribution coefficient were used as model drugs. Drug penetration was evaluated in Ussing chambers using isolated segments of the duodenum, jejunum, ileum, ascending colon, descending colon, and rectum. Esterase and ketone reductase activities were determined in homogenates of the above segments using timolol ester prodrugs and levobunolol as substrates, respectively. The results indicate that the hydrophilic beta adrenergic antagonists atenolol and sotalol and moderately lipophilic metoprolol penetrated all intestinal segments equally well, whereas moderately lipophilic timolol and lipophilic propranolol, levobunolol and betaxolol were better absorbed from the large than from the small intestinal segments. Changes in lipophilicity exerted a more pronounced effect on the penetration of beta adrenergic antagonists in the large than the small intestinal segments. A similar pattern existed for timolol prodrugs. In addition to segmental differences in drug permeability, segmental differences in esterase and ketone reductase activities also existed. The level of esterase and ketone reductase activities in the small intestinal segments was, on average, 12 times and 5 times higher, respectively, than in the large intestinal segments. The implication of the above findings is that segmental differences in drug permeability and metabolism must be considered in the design of oral drug delivery systems.