Herbal drugs were screened for their activity in reversing multidrug resistance (MDR) in P-glycoprotein (P-gp) over-expressing cancer cells. Through bio-assay guided fractionation an active compound was isolated from Rhizoma Alismatis, the underground part of Alisma orientale and the chemical structure of the isolate compound was confirmed by HPLC, LC-MS and NMR as Alisol B 23-acetate (ABA). ABA restored the sensitivity of MDR cell lines HepG2-DR and K562-DR to anti-tumor agents that have different modes of action but are all P-gp substrates. It restored the activity of vinblastine, a P-gp substrate, in causing G2/M arrest in MDR cells. In a dose-dependent manner, ABA increased doxorubicin accumulation and slowed down the efflux of rhodamin-123 from MDR cells. ABA inhibited the photoaffinity labeling of P-gp by [125I]iodoarylazidoprazosin and stimulated the ATPase activity of P-gp in a concentration-dependent manner, suggesting that it could be a transporter substrate for P-gp. In addition, ABA was also a partial non-competitive inhibitor of P-gp when verapamil was used as a substrate. Our results suggest that ABA may be a potential MDR reversal agent and could serve as a lead compound in the development of novel drugs.