ABCG2 is an ATP-binding-cassette (ABC) transporter that confers multidrug resistance (MDR) to tumor cells by extruding a broad variety of chemotherapeutic agents, ultimately leading to failure of cancer therapy. Thus, the down-regulation of ABCG2 expression and/or function has been proposed as part of a regimen to improve cancer therapeutic efficacy. In this study, we found that a group of xanthines including caffeine, theophylline, and dyphylline can dramatically decrease ABCG2 protein in cells that have either moderate (BeWo, a placental choriocarcinoma cell line) or high (MCF-7/MX100, a breast cancer drug-resistant cell subline) levels of ABCG2 expression. This down-regulation is time-dependent, dose-dependent, and reversible. Using lysosomal inhibitors, we found that xanthines decreased ABCG2 by inducing its rapid internalization and lysosome-mediated degradation. As a consequence, caffeine treatment significantly increased the retention of an established ABCG2 substrate in MCF-7/MX100 cells but not in parental MCF-7 cells and sensitized the MDR cells to the chemotherapeutic agent mitoxantrone (MX); combination treatment with MX and caffeine decreased the IC(50) of MX ~10-fold and induced a greater degree of apoptotic cell death than MX treatment alone. Taken together, our results describe a novel function for this large class of therapeutically relevant compounds and suggest that a subset of xanthines could be developed as combination therapy to improve the efficacy of anticancer drugs that are ABCG2 substrates.