Ascorbate has multiple biological roles and chemical interactions, some of which differ between normal and cancerous tissues. Biological effects of ascorbate depend on concentration, route of exposure, and duration of exposure. High-dose ascorbate acts as a pro-oxidant in tissue fluids and delivers peroxide to tissues and fluids, which is then detoxified by erythrocytes and plasma catalase in normally perfused areas. We have previously shown that nanoparticles incorporating palmitoyl ascorbate (PA) targeted and killed cancer cells in vitro. Here, our studies provide additional indications of the importance of extracellular reactive oxygen species (ROS) in the anti-cancer-toxicity by PA-liposomes. Cell death in vitro can be blocked by catalase, superoxide dismutase, and the thiol reductant TCEP. Intracellullar iron may also play a role. Iron chelation by desferrioxamine inhibited cell death but EDTA did not. Further, the fluorescent marker of ROS production in cells indicated that the PA-liposomes caused an increase in ROS. Fluorescent microscopy of tumor sections taken at 3h after injection of rhodamine-labeled liposomes demonstrated an increased accumulation of PA-liposomes compared to plain liposomes. However, the overall biodistribution of (111)In-labeled PA-liposomes was similar to plain liposomes. PA-liposomes provided substantial anti-tumor activity in vivo and enhanced the anti-cancer activity of liposomally encapsulated paclitaxel. Thus, nanoparticles incorporating PA provide a platform for enhancement of the anti-tumor activity of ascorbate.