Pseudolaric acid-B (PLAB), a diterpene acid, was isolated from the root and trunk barks of Pseudolarix kaempferi. It showed antifungal and anti-fertility effects as well as cytotoxic activities in previous studies. The present study investigates cytotoxic activity on cultured human cancer cells, inhibition on the growth of transplantable tumours in mice and the mechanism of these actions. The experimental results showed that PLAB had potent cytotoxic effects on cancer cells derived from different tissues. MTT assay showed that its IC50 towards these tumour cells was 0.17 to 5.20 micromol/L, and towards one normal human kidney proximal tubular epithelial cell (HKC) was 5.77 micromol/L. Furthermore, the results of cell growth curve and colony formation of cancer cells matched the above results. The results in vivo demonstrated that PLAB significantly inhibited the growth of transplantable tumours, such as Lewis lung cancer and hepatocarcinoma 22 (H22) in mice. The inhibitory rate to H22 was 14.4% and 40.1%, and to Lewis lung cancer reached 39.1% and 47.0%, when PLAB was given by intraperitoneal injection (i.p.) at a dose of 30 mg/kg/day and 60 mg/kg/day for 10 days, respectively. It is suggested that PLAB also showed obvious anticancer activity in vivo. Inducing apoptosis by PLAB in HeLa cells was assessed by various morphological and biochemical characteristics, including cell shrinkage, chromatin condensation, membrane blebbing, formation of apoptotic bodies, and internucleosomal DNA fragmentation. A typical 'sub-G1 peak' was also checked through flow cytometry. These results were accompanied by up-regulating P53, down-regulating Bcl-2 and activating Caspase-3, which was revealed by Western blotting. PLAB also caused cell cycle arrest to G2/M phase in a dose-dependent manner. The experiments suggest that PLAB is a new potent anti-tumour agent.