The effects of oxidative stress (ascorbic acid—ferrous system) on the proliferation, differentiation and apoptosis of the human hepatoma cell SMMC-7721 were studied. Oxidative stress significantly inhibited cell proliferation and induced morphological differentiation. Whatever the indices related with cell malignancy, such as α-fetoprotein and c-glutamyltranspeptidase or the index related with cell differentiation, such as tyrosine-α-ketoglutarate transaminase, all inclined evidently to normalization. The tumour's clonogenic potential decreased significantly. Moreover, together with differentiation, the phenomenon of apoptosis was found by the appearance of apoptotic bodies, detached cells, and apoptotic morphological feature. Although, their DNA was not degraded into oligonucleosomal fragmentation, the DNA was cut into larger fragments (about 21.2kbp) of a size associated with chromatin loops. These findings indicated that oxidative stress can induce both differentiation and apoptosis simultaneously in tumour cells. All the results showed that oxidative stress may initiate the tumour cells reverse transformation. The possible mechanism of the differentiation and apoptosis induced by oxidative stress may be related to the lipid peroxidation of cell membrane.