The water extract of Panax ginseng was fractionated by its solubility in ethanol and then the ethanol-insoluble fraction was tested for immunomodulatory activity. The ethanol-insoluble fraction of ginseng (Fr. 3) proliferated splenocytes and generated activated killer cells in vitro. These activated killer cells killed both NK cell sensitive and insensitive tumor target cells without MHC-restriction. Activation of splenocytes by ginseng was mediated through the endogenously produced IL-2. To investigate the effects of Fr.3 on the autochthonous neoplasm, a single subcutaneous injection of 0.5 mg of benzo[a]pyrene (BP) was given within 24 hours after birth of male N: GP(S) mice, and Fr.3 was administered in drinking water at a concentration of 2 mg/ml, 1 mg/ml, or 0.5 mg/ml for 6 weeks after weaning. The treatment with Fr. 3 significantly inhibited lung tumor incidence (P < 0.05) compared with the BP alone group at a concentration of 2 mg/ml or 1 mg/ml in drinking water at the 9th week after BP treatment. These results suggest that the ethanol-insoluble fraction of ginseng shows antitumor effects as an immunomodulator.