Objectives Leflunomide (LFNM) is a drug that belongs to isoxazole derivatives and has immunosuppressive and anti-inflammatory activities. A literature search confirms that there is no method reported for the simultaneous estimation of LFNM and its related impurities A and B in pharmaceutical dosage forms or in bulk drug. Hence the present work aimed to develop a simple stability indicating RP-HPLC method for the separation and quantification of LFNM and its impurities A and B. Materials and methods Systematic trials of method conditions like mobile phase ratio, pH, flow rate, stationary phase, and detector wavelength were performed for the simultaneous analysis of LFNM and its related impurities A and B. The developed method was validated as per the ICH guidelines including forced degradation studies in different stress conditions. Results Optimized separation was achieved on a Thermo Scientific Hypersil ODS C18 column (250 mm×4.6 mm; 5 μm id) using mobile phase composition of acetonitrile, methanol, and 0.1 M sodium perchlorate in the ratio of 40:30:30 (v/v), pH 4.6, at a flow rate of 1.0 mL/min in isocratic elution. UV detection was carried out at a wavelength of 246 nm. Well-resolved peaks were observed with high numbers of theoretical plates, lower tailing factor, and reproducible relative retention time and response factor. The method was validated and all the validation parameters were found to be within the acceptance limits. Stability tests were done through exposure of the analyte solution to five different stress conditions, i.e. 1 N HCl, 1 N NaOH, 3% H2O2, thermal degradation of powder, and exposure to UV radiation. The method can successfully separate the degradation products along with both the impurities studied. The % degradation was also found to be less. Conclusion The method developed for LFNM is simple and precise and can be applied for the separation and quantification of LFNM and its related impurities in bulk drug and pharmaceutical formulations.