Arsenic trioxide (As2O3; ATO) has considerable efficacy in the treatment of relapsed acute promyelocytic leukemia (APL), inducing partial differentiation and promoting apoptosis of malignant promyelocytes. Although initial studies focused on the role of the characteristic APL fusion protein, PML-RARalpha, in mediating response to ATO, subsequent investigations have revealed that ATO acts on numerous intracellular targets. ATO broadly affects signal transduction pathways and causes a wide range of alterations leading to apoptosis. Key mediators of sensitivity to ATO-induced apoptosis include intracellular glutathione and hydrogen peroxide (H2O2). The loss of inner mitochondrial membrane potential is also an important step in ATO-mediated cell killing. Cellular and physiologic pathways affected by ATO provide some clues as to the mechanisms for the biologic effects of ATO. Recent research has shown that hematologic cancers other than APL and solid tumors derived from several tissue types may be responsive to monotherapy or combination therapy with ATO. A better understanding of the mechanisms of action of ATO may help guide the use of ATO for the treatment of a wide variety of malignancies and allow its potential in cancer therapy to be fully realized.