Intracellular traffic of human P-glycoprotein (P-gp), a membrane transporter responsible for multidrug resistance in cancer chemotherapy, was investigated using a P-gp and enhanced green fluorescent fusion protein (P-gp-EGFP) in human breast cancer MCF-7 cells. The stably expressed P-gp-EGFP from a clonal cell population was functional as a drug efflux pump, as demonstrated by the inhibition of daunorubicin accumulation and the conferring of resistance of the cells to colchicine and daunorubicin. Colocalization experiments demonstrated that a small fraction of the total P-gp-EGFP expressed was localized intracellularly and was present in early endosome and lysosome compartments. P-gp-EGFP traffic was shown to occur via early endosome transport to the plasma membrane. Subsequent movement of P-gp-EGFP away from the plasma membrane occurred by endocytosis to the early endosome and lysosome. The component of the cytoskeleton responsible for P-gp-EGFP traffic was demonstrated to be actin rather than microtubules. In functional studies it was shown that in parallel with the interruption of the traffic of P-gp-EGFP, cellular accumulation of the P-gp substrate daunorubicin was increased after cells were treated with actin inhibitors, and cell proliferation was inhibited to a greater extent than in the presence of daunorubicin alone. The actin dependence of P-gp traffic and the parallel changes in cytotoxic drug accumulation demonstrated in this study delineates the pathways of P-gp traffic and may provide a new approach to overcoming multidrug resistance in cancer chemotherapy.