Determinants of differentiation and apoptosis induction by the novel histone deacetylase inhibitor (HDACI) LAQ824 were examined in human leukemia cells (U937 and Jurkat). Exposure of U937 cells to a low concentration of LAQ824 (30 nM) resulted in a delayed (2 h) increase in reactive oxygen species (ROS), induction of p21(WAF1/CIP1), pRb dephosphorylation, growth arrest of cells in G(0)/G(1) phase, and differentiation. On the other hand, exposure of cells to a higher concentration of LAQ824 (75 nM) resulted in the early (30 min) generation of ROS, arrest of cells in G(2)/M phase, down-regulation of XIAP (at the transcriptional level) and Mcl-1 (through a caspase-mediated process), the acid sphingomyelinase-dependent generation of ceramide, and profound mitochondrial injury, caspase activation, and apoptosis. LAQ824-induced lethality in U937 cells did not involve the extrinsic apoptotic pathway, nor was it associated with death receptor up-regulation; instead, it was markedly inhibited by ectopic expression of Bcl-2, Bcl-x(L), XIAP, and Mcl-1. The free radical scavenger N-acetyl cysteine blocked LAQ824-mediated ROS generation, mitochondrial injury, Mcl-1 down-regulation, ceramide generation, and apoptosis, suggesting a primary role for oxidative injury in LAQ824 lethality. Together, these findings indicate that LAQ824-induced lethality represents a multifactorial process in which LAQ824-mediated ROS generation is necessary but not sufficient to induce apoptosis, and that the degree of XIAP and Mcl-1 down-regulation and ceramide generation determines whether this agent engages a maturation rather than an apoptotic program.