The dihydroxy derivative of VP-16 (DHVP), a novel metabolite of the clinically active antitumor drug VP-16, was cytotoxic to human breast tumor cells. It was found that DHVP chelates iron and catalyzes the formation of hydroxyl radicals from hydrogen peroxide and reduced glutathione. Ethanol, polyethylene glycol and t-butanol inhibited the formation of DMPO-OH, suggesting that perferryl iron was not involved in OH' formation. Under conditions which formed hydroxyl radicals, DHVP also induced nicking of SV40 DNA, suggesting that the mechanism of tumor cell killing by DHVP may involve iron-dependent free radical formation.