In many cases, the process of cancer cell differentiation is associated with the programmed cell death. In the present study, interestingly, we found that eupatilin, one of the pharmacologically active ingredients of Artemisia asiatica that has been reported to induce apoptosis in human gastric cancer AGS cells, also triggers differentiation of these cells. Treatment of AGS cells with eupatilin induced cell cycle arrest at the G(1) phase with the concomitant induction of p21(cip1), a cell cycle inhibitor. This led us to test whether eupatilin may trigger AGS cells to differentiate into the matured phenotypes of epithelial cells and this phenomenon may be coupled to the apoptosis. Eupatilin induced changes of AGS cells to a more flattened morphology with increased cell size, granularity, and mitochondrial mass. It also markedly induced trefoil factor 1 (TFF1), a gene responsible for the gastrointestinal cell differentiation. Eupatilin dramatically induced redistribution of tight junction proteins such as occludin and ZO-1, and F-actin at the junctional region between cells. It also induced phosphorylation of extracellular signal-regulated kinase 2 and p38 kinase. Blockade of ERK signaling by PD098059 or the dominant-negative ERK2 significantly reduced eupatilin-induced TFF1 and p21 expression as well as ZO-1 redistribution, indicating that ERK cascades may mediate eupatilin-induced AGS cell differentiation. Collectively, our results suggest that eupatilin acts as a novel anti-tumor agent by inducing differentiation of gastrointestinal cancer cells rather than its direct role in inducing apoptotic cell death.