Pancreatic cancer has the worst prognosis of all cancers with a dismal 5-year survival rate. Hence, there is a tremendous need for development of new and effective therapy for this tumor. In an earlier study we reported a potent antitumor activity of Auristatin PE (AuriPE) against pancreatic tumor. In addition, we have also reported that bryostatin 1 (bryo1) induces differentiation of leukemia cells, but the effect of bryo1 has not been investigated in pancreatic tumors. This is the first report where we demonstrate that bryo1 induces differentiation and potentiates the antitumor effect of AuriPE in a human pancreatic tumor (PANC-1) xenograft model. A xenograft model was established by injecting the PANC-1 cells s.c. in severe combined immune deficient (SCID) mice. After development of the s.c. tumors, tumors were dissected and small fragments were transplanted in vivo to new SCID mice, with a success rate of 100% and a doubling time of 4.8 days. The SCID mouse xenograft model was used to test the in vivo differentiation effect of bryo1 and its efficacy when given alone or in combination with AuriPE. Sections from paraffin-embedded tumors excised from untreated (control) SCID mice revealed typical poorly differentiated adenocarcinoma of the pancreas. Interestingly, sections of s.c. tumors taken from bryo1-treated mice revealed carcinomas that were much lower grade and less aggressive, and displayed prominent squamous and glandular differentiation. In this study, the tumor growth inhibition (T/C), activity score and cure rate for bryo1, AuriPE and bryo1+AuriPE were 80%, (+) and 0/4; 0.0%, (++++) and 3/5; and 0.0%, (++++) and 3/4, respectively. Mice treated with either AuriPE or bryo1+AuriPE were free of tumors for more than 150 days and were considered cured. The use of bryo1 as a novel differentiating agent and its combination with AuriPE should be further explored for the treatment of adenocarcinoma of the pancreas.