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Indirubin is the active ingredient of a traditional Chinese herbal medicine, Danggui Longhui Wan, used for the treatment of chronic myelocytic leukemia. Here, we report that novel indirubin derivative, 5'-nitro-indirubinoxime (5'-NIO), has potent anti-proliferative activity on various human cancer cells and oncogenic RK3E-ras rat kidney cells with half-inhibitory concentrations (IC50) ranging from 1-12 M. Treatment with indirubin derivative induced the activation of caspase 7 followed by apoptosis in RK3E-ras cells. Indirubin derivative showed strong anti-tumor activity in rat solid and oral tumor models. Direct injection of indirubin derivative every other day for 10 days induced significant inhibition of tumor growth in Sprague-Dawley rats bearing RK3E-ras-induced tumors. Histologically, treatment with indirubin derivative caused significant inhibition of tumor formation with increased apoptosis and decreased tumor cell proliferation. These findings provide the potential value of indirubin derivative as a novel candidate for anti-tumor agents.