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Multidrug resistance (MDR) is a major impediment to the effective chemotherapy of many human malignancies, and novel MDR reversal agents are desirable for combination therapy to reduce MDR, enhance anti-tumor activity and reduce side effects. Overexpression of P-glycoprotein (P-gp) is the most prevalent cause of MDR in cancer tissues, and resistance to apoptosis is a common characteristic for the multidrug resistant cancer cells. Our group has synthesized a novel potent anti-tumor indirubin derivative, PHII-7. In this study, MCF-7/ADR cells, an adriamycin (ADR)-selected human breast tumor cell line with the MDR phenotype, were used to investigate the anticancer properties of this novel indirubin derivative. Cytotoxicity and apoptosis assays showed that PHII-7 significantly inhibited cell growth, induced apoptosis, potentiated ADR cytotoxicity and restored chemotherapy sensitivity in the MDR cancer cells. Further studies indicated that by down-regulation of P-gp expression, PHII-7 partially inhibited P-gp efflux pump function and increased intracellular accumulation of Rhodamine 123, a P-gp substrate. These results provide a biochemical basis for possible clinical application of PHII-7 alone or in combination with conventional antineoplastic agents in the treatment MDR tumors.