The anti‐tumor activity of the putative differentiation‐inducing agent dimethylformamide (DMF) was assessed in 7 head‐and‐neck xenograft (HNX) lines transplanted into nude mice. The drug was administered intra‐peritoneally at the maximum tolerated dose. A significant growth‐inhibitory effect was observed in 3 out of 7 tumor lines tested. When compared with 5 conventional drugs active in patients with squamous‐cell carcinoma of the head and neck (HNSCC), DMF was as effective as the most active drugs (cisplatin and bleomycin). The most sensitive xenograft line, the poorly differentiated tumor HNX‐14C, was used to test the hypothesis that differentiation induction might play a role in the antitumor activity of DMF. Light microscopic examination did not show clear‐cut alteration of differentiation characteristics such as keratin and keratin pearl formation. Furthermore, we used a monoclonal antibody to study the expression of cytokeratin 10 which is useful as a differentiation marker of human HNSCC tumors. Keratin 10, not present in HNX‐14C tumors grown under control conditions, became expressed in some cells upon DMF treatment. Further evidence for a differentiation‐inducing activity of DMF was found in electron‐microscopic studies. In treated HNX‐14C tumors, in addition to cells with normal ultrastructural features, better‐differentiated cells were observed, as manifested by an increase in the number of tonofilaments and desmosomes. The results show that DMF has a potential value for the treatment of patients with head‐and‐neck cancer, and that differentiation induction might play a role in the anti‐tumor action of the drug.