Phellinus linteus was examined for its anticancer activity using an animal model. Water extract of Phellinus linteus was prepared from artificially cultivated mycelia. Neither toxicity nor abnormal changes of hematological parameters were observed in the rat given orally with high doses of drug extract for 15 days. ICR mice were transplanted with Sarcoma-180 tumor cells intraperitoneally and drug extract was daily given to the mice from 1 day after tumer transplantation for 3 weeks. Administration of drug extract significantly prolonged the survival duration of Sarcoma 180-transplanted mice. For the better understanding of the anticancer activity, we have examined the effect of the drug extract administration on various killer cell functions, such as natural killer(NK) cells, cytotoxic T-lymphocytes (CTL) and macrophages which have been known to be main effector cells in immune responses against tumors. The results from the 4 hr $^{51}Cr-release$ assay have shown that the drug extract augments mouse NK cell activity but neither CTL nor macrophages. It is possible, then, that the anticancer activity of the Phellinus linteus may be associated with augmentation of NK cell function in the cancerated hosts.