This study was aimed at elucidating the mechanism by which FTY720, a synthetic sphingosine immunosuppressant, mediated antitumor effects in hepatocellular carcinoma (HCC) cells. The three HCC cell lines examined, Hep3B, Huh7, and PLC5, exhibited differential susceptibility to FTY720-mediated suppression of cell viability, with IC₅₀ values of 4.5, 6.3, and 11 μmol/L, respectively. Although FTY720 altered the phosphorylation state of protein kinase B and p38, our data refuted the role of these two signaling kinases in FTY720-mediated apoptosis. Evidence indicates that the antitumor effect of FTY720 was attributable to its ability to stimulate reactive oxygen species (ROS) production, which culminated in protein kinase C (PKC)δ activation and subsequent caspase-3–dependent apoptosis. We showed that FTY720 activated PKCδ through two distinct mechanisms: phosphorylation and caspase-3–dependent cleavage. Cotreatment with the caspase-3 inhibitor Z-VAD-FMK abrogated the effect of FTY720 on facilitating PKCδ proteolysis. Equally important, pharmacologic inhibition or shRNA-mediated knockdown of PKCδ protected FTY720-treated Huh7 cells from caspase-3 activation. Moreover, FTY720 induced ROS production to different extents among the three cell lines, in the order of Hep3B > Huh7 >> PLC5, which inversely correlated with the respective glutathione S-transferase π expression levels. The low level of ROS generation might underlie the resistant phenotype of PLC5 cells to the apoptotic effects of FTY720. Blockade of ROS production by an NADPH oxidase inhibitor protected Huh7 cells from FTY720-induced PKCδ activation and caspase-3–dependent apoptosis. Together, this study provides a rationale to use FTY720 as a scaffold to develop potent PKCδ-activating agents for HCC therapy. [Cancer Res 2008;68(4):1204–12]