Summary: Skin-friction drag reduction in turbulent boundary layer flow of inhomogeneous polymer solutions is investigated using direct numerical simulations. A continuum constitutive model (FENE-P) accounting for the effects of polymer microstructure and concentration is used to describe the effect of viscoelasticity. The evolution of wall friction along the streamwise direction is a function of the dynamics of the polymer distribution in the boundary layer. It is observed that polymer transport decreases drag reduction downstream compared to the homogeneous case. The fluctuations of polymer concentration are anti-correlated with those of the streamwise velocity. Concentration is largest in the low-speed streaks. The physical process creating this effect is primarily that of dilution of the high-speed streaks, where due to the local turbulence structure the dispersion of polymer is strongest. Thus, the polymer-induced drag reduction phenomenon is sustained primarily in the vicinity of the low-speed streaks where the injected polymer additive is most effective.