We have synthesized several new phenyl maleimide compounds, which are potent growth inhibitors of several human tumor cell lines. Among these, PM-20 was the most potent with an IC50 of 700 nmol/L for Hep3B human hepatoma cell growth. Two other derivatives, PM-26 and PM-38, did not inhibit Hep3B cell growth even at 100 micromol/L. Interestingly, under identical experimental conditions, PM-20 inhibited DNA synthesis of primary cultures of normal hepatocytes at a 10-fold higher concentration than that needed to inhibit the DNA synthesis of the Hep3B hepatoma cells. PM-20 affected two cellular signaling pathways in Hep3B cells: Cdc25 phosphatase and extracellular signal-regulated kinase (ERK) 1/2. It competitively inhibited the activity of Cdc25 (preferentially Cdc25A) by binding to the active site, likely through the catalytic cysteine, but did not inhibit PTP1B, CD45, or MKP-1 phosphatases. As a result of its action, tyrosine phosphorylation of the cellular Cdc25A substrates Cdk2 and Cdk4 was induced. It also induced strong and persistent phosphorylation of the Cdc25A substrate ERK1/2. Hep3B cell lysates were found to contain ERK2 phosphatase(s) activity, which was inhibited by the actions of PM-20. However, activity of exogenous dual-specificity ERK2 phosphatase MKP1 was not inhibited. Induction of ERK1/2 phosphorylation correlated with the potency of growth inhibition in tumor cell lines and inhibition of ERK1/2 phosphorylation by the mitogen-activated protein kinase (MAPK)/ERK kinase 1/2 inhibitor U0126 or overexpression of the cdc25A gene in Hep3B cells antagonized the growth inhibitory actions of PM-20. Growth of transplantable rat hepatoma cells in vivo was also inhibited by PM-20 action with a concomitant induction of pERK in the tumors. The mechanism(s) of growth inhibition of Hep3B hepatoma cells by the phenyl maleimide PM-20 involves prolonged ERK1/2 phosphorylation, likely resulting from inhibition of the ERK phosphatase Cdc25A. PM-20 thus represents a novel class of tumor growth inhibitor that inhibits mainly Cdc25A, is dependent on ERK activation, and has a considerable margin of selectivity for tumor cells compared with normal cells.