Histone deacetylase (HDAC) inhibitors have been shown to have antitumor activity in vitro and in vivo. Various studies related to their antitumor activity and mechanism of action have been reported for HDAC inhibitors, but the relationship of their antitumor effects to their pharmacodynamic and pharmacokinetic properties in vivo has not ever fully characterized. We report here the discovery of a novel cyclic-peptide-based HDAC inhibitor, YM753. YM753 is a bacteria-derived natural product containing a disulfide bond. It potently inhibited HDAC enzyme with an IC50 of 2.0 nM in the presence of dithiothreitol. YM753 was rapidly converted to a reduced form in tumor cells, and then induced accumulation of acetylated histones, followed by p21WAF1/Cip1 expression, tumor cell growth inhibition and tumor-selective cell death. In an in vitro washout study, YM753 showed prolonged accumulation of acetylated histones in WiDr human colon carcinoma cells. In vivo YM753 dosing of mice harboring WiDr colon tumor xenografts significantly inhibited the tumor growth via sustained accumulation of acetylated histones in the tumor tissue. In a pharmacokinetic study, YM753 rapidly disappeared from the plasma, but its reduced form remained in the tumor tissue. Moreover, the accumulation of acetylated histones induced by YM753 was tumor tissue selective compared to several normal tissues. This study provides evidence that YM753 has antitumor activity that is the result of selective, sustained accumulation of acetylated histones in tumor tissues despite rapid disappearance of the drug from the plasma. These results suggest that the novel HDAC inhibitor, YM753 has attractive pharmacodynamic and pharmacokinetic properties giving it potential as an antitumor agent.