Escherichia coli purine nucleoside phosphorylase (PNP) catalyzes the cleavage of 9-(2-deoxy-beta-D-ribofuranosyl)-6-methylpurine (MeP-dR), while human PNP does not. MeP-dR is well tolerated while the cleavage product, 6-methylpurine (MeP), is highly cytotoxic. This clinical profile suggests an anticancer gene therapy strategy in which solid tumors are transfected with the gene for E. coli PNP. Tumor cells expressing E. coli PNP will liberate MeP and be killed. Furthermore, MeP released from the cell via the purine transport system will enter nearby cells, resulting in bystander killing of tumor cells. To reduce toxicity resulting from activation of MeP-dR by intestinal tract flora, we redesigned the E. coli PNP active site to cleave prodrugs that are not cleaved by wild type E. coli PNP. It is possible that the variation of substrate specificity among enzymes that cleave nucleosides will have broader application in the gene therapy approach to prodrug activation. Here we review progress in the development of E. coli PNP anticancer gene therapy. We also review the structural basis for activity of nucleoside phosphorylases and suggest future directions for the development of activating enzymes for suicide gene therapy.