Melanoma differentiation-associated gene-7/interleukin-24 (mda-7/IL-24) is a unique member of the IL-10 gene family that induces cancer-selective growth suppression and apoptosis in a wide spectrum of human cancers in cell culture and animal models. Additionally, recent clinical trials confirm safety and document significant clinical activity of mda-7/IL-24 in patients with diverse solid cancers and melanomas. Despite intensive study the molecular basis of tumor-cell selectivity of mda-7/IL-24 is not well characterized. Using deletion analysis, a specific mutant of MDA-7/IL-24, M4, consisting of amino acids 104 to 206, is described that retains the cancer-specific growth-suppressive and apoptosis-inducing properties of the full-length protein. Employing rationally designed mutational analysis, we show that MDA-7/IL-24 and M4 physically interact with BiP/GRP78 through their C and F helices, localize in the endoplasmic reticulum, and activate p38 MAPK and GADD gene expression, culminating in cancer-selective apoptosis. These studies provide novel mechanistic insights into the discriminating antitumor activity of MDA-7/IL-24 by elucidating BiP/GRP78 as a defined intracellular target of action and present an unparalleled opportunity to develop improved therapeutic versions of this cancer-specific apoptosis-inducing cytokine.