Histone deacetylase (HDAC) inhibitors are currently used in the study of epigenetics and have potential in clinical cancer therapy. A novel and potent HDAC inhibitor, depsipeptide, also known as FK228 or FR901228, is highly efficient in inhibiting the activity of HDACs even at nanomolar concentrations. Depsipeptide has a unique structure that is distinct from most of the other HDACs, and it thus exhibits diverse pharmacologic functions. In addition, depsipeptide has a metabolic activation pathway, which affects many intracellular processes. However, the specific features of this pathway are as yet not completely worked out. In this article, we will focus on the uniqueness of this molecules specific structure, the relationship of this structure to its putative metabolic activation pathway, and specifically review its newly discovered biological functions and clinical applications.