We have previously proposed the horseradish peroxidase (HRP) and the non-toxic plant hormone indole-3-acetic acid (IAA) as a novel system for gene-directed enzyme/prodrug therapy (GDEPT). The cytotoxic potential of HRP/IAA GDEPT and the induction of a bystander effect were demonstrated in vitro under normoxic as well as hypoxic tumour conditions. To date, the chemical agents and the cellular targets involved in HRP/IAA-mediated toxicity have not been identified. In the present work, some of the molecular and morphological features of the cells treated with HRP/IAA gene therapy were analysed. Human T24 bladder carcinoma cells transiently transfected with the HRP cDNA and exposed to the prodrug IAA showed chromatin condensation, formation of apoptotic bodies, DNA fragmentation, and Annexin V binding. Similar effects were observed when the cells were incubated with the apoptotic agent cisplatin. Caspases appeared to be involved as effectors in HRP/IAA-mediated apoptosis, since treatment with a general caspase inhibitor decreased the fraction of cells with micronuclei (MN) by 30%, with fragmented DNA by 50%, and with condensed chromatin by 60%. However, very little degradation of one of the downstream targets of caspase-3, PARP, could be detected, and apoptosis alone did not appear to account for the killing levels measured with a clonogenic assay. The effect of HRP/IAA treatment on cell cycle progression was also investigated, and a rapid cytostatic effect, equally affecting all phases of the division cycle, was observed. J. Cell. Biochem. 87: 221–232, 2002. © 2002 Wiley-Liss, Inc.