Despite decades of development of treatments and the successful application of targeted therapies for multiple myeloma, clinical challenges remain for patients with relapsed/refractory disease. A drug designed for efficient delivery of an alkylating payload into tumor cells that yields a favorable therapeutic window can be an attractive choice.Herein we describe melphalan flufenamide (melflufen), a drug with a peptide carrier component conjugated to an alkylating payload, and its cellular metabolism. We further underline the fundamental role of enzymatic hydrolysis in the rapid and robust accumulation of alkylating metabolites in cancer cells and their importance for downstream effects. The formed alkylating metabolites were shown to cause DNA damage, both on purified DNA and on chromatin in cells, with both nuclear and mitochondrial DNA affected in the latter. Furthermore, the rapid intracellular enrichment of alkylating metabolites is shown to be essential for the rapid kinetics of the downstream intracellular effects such as DNA damage signaling and induction of apoptosis. To evaluate the importance of enzymatic hydrolysis for melflufen's efficacy, all four stereoisomers of the compound were studied in a systematic approach and shown to have a different pattern of metabolism. In comparison with melflufen, stereoisomers lacking intracellular accumulation of alkylating payloads showed cytotoxic activity only at significantly higher concentration, slower DNA damage kinetics, and different mechanisms of action to reach cellular apoptosis.