E2F-1, a key transcription factor necessary for cell growth, DNA repair and differentiation, is an attractive target for development of useful anticancer drugs in tumors that are E2F "oncogene addicted". A peptide, isolated from phage clones, based on its binding to an E2F-1 consensus sequence, was cytotoxic against a wide range of cancer cell lines. The peptide was coupled to penetratin (PEP) and tested against prostate cancer cell lines, and a fresh sample from a patient with metastatic cancer. As the PEP was found to be relatively unstable in serum, it was encapsulated in PEGylated liposomes for in vivo studies. The peptide was cytotoxic against prostate cell lines and a fresh sample from a patient with metastatic prostate cancer. Treatment of mice bearing the human Du-145 human prostate tumor with the PEP encapsulated in PEGylated liposomes (PL-PEP) caused tumor regression without significant toxicity. The liposome encapsulated PEP has promise as an antitumor agent, alone or in combination with inhibitors of DNA synthesis.