Costunolide has been reported to be a cytotoxic and chemopreventive agent. This work investigated the mechanism of the antiproliferative effect of costunolide and determined that it induced differentiation of the human leukemia cell line HL-60. Costunolide exhibited a potent antiproliferative activity against HL-60 cells. It was also found to be a potent inducer of differentiation in human leukemia derived HL-60 cells through the examination of differentiation markers, as assessed by the reduction of nitroblue-tetrazolium, the increase in esterase activities and phagocytic activity, morphology change and the expression of CD14 and CD66b surface antigens. These results, accompanied by a decline in the expression of c-myc protein, suggest that costunolide induces differentiation of human leukemia cells to granulocytes and monocytes/macrophages lineage.