The ubiquitin proteasome system is responsible for the proteolysis of important cell cycle and apoptosis-regulatory proteins. In this paper we report that the dipeptidyl proteasome inhibitor, phthalimide-(CH2)8CH-(cyclopentyl) CO-Arg(NO2)-Leu-H (CEP1612), induces apoptosis and inhibits tumor growth of the human lung cancer cell line A-549 in an in vivo model. In cultured A-549 cells, CEP1612 treatment results in accumulation of two proteasome natural substrates, the cyclin-dependent kinase inhibitors p21WAF1 and p27KIP1, indicating its ability to inhibit proteasome activity in intact cells. Furthermore, CEP1612 induces apoptosis as evident by caspase-3 activation and poly(ADP-ribose) polymerase cleavage. Treatment of A-549 tumor-bearing nude mice with CEP1612 (10 mg/kg/day, i.p. for 31 days) resulted in massive induction of apoptosis and significant (68%; P < 0.05) tumor growth inhibition, as shown by terminal deoxynucleotidyltransferase-mediated UTP end labeling. Furthermore, immunostaining of tumor specimens demonstrated in vivo accumulation of p21WAF1 and p27KIP1 after CEP1612 treatment. The results suggest that CEP1612 is a promising candidate for further development as an anticancer drug and demonstrate the feasibility of using proteasome inhibitors as novel antitumor agents.