Honokiol is a small-molecule polyphenol isolated from the genus Magnolia. It is accompanied by other related polyphenols, including magnolol, with which it shares certain biologic properties. Recently, honokiol has been found to have antiangiogenic, antiinflammatory, and antitumor properties in preclinical models, without appreciable toxicity. These findings have increased interest in bringing honokiol to the clinic as a novel chemotherapeutic agent. In addition, mechanistic studies have tried to find the mechanism(s) of action of honokiol, for two major reasons. First, knowledge of the mechanisms of action may assist development of novel synthetic analogues. Second, mechanistic actions of honokiol may lead to rational combinations with conventional chemotherapy or radiation for enhanced response to systemic cancers. In this review, we describe the findings that honokiol has two major mechanisms of action. First, it blocks signaling in tumors with defective p53 function and activated ras by directly blocking the activation of phospholipase D by activated ras. Second, honokiol induces cyclophilin D, thus potentiating the mitochondrial permeability transition pore, and causing death in cells with wild-type p53. Knowledge of the dual activities of honokiol can assist with the development of honokiol derivatives and the design of clinical trials that will maximize the potential benefit of honokiol in the patient setting.