Although arsenic is known to cause cancers of lung, skin and kidney, arsenic trioxide (As2O3) has been recently recognized as one of the most effective novel anticancer agent for the treatment of acute promyelocytic leukemia (APL). These paradoxical effects of arsenic may be dose-dependent, associated with its distinctive metabolism, or correlated with its direct or indirect effects on different cellular pathways which may result in altered cellular functions. The basic mechanism through which As2O3 induces molecular remission in APL patients include direct targeting of PML and retinoic acid receptor alpha fusion protein (PML-RARα) by arsenic resulting in oncoprotein degradation leading to partial differentiation. Many in vitro studies have also indicated that the anticancer properties of As2O3 against non-APL blood cancers predominantly occur through induction of apoptotic pathway. Especially, release of cytochrome c or activation of the caspase cascades and apoptosis-related proteins by arsenic is thought to occur by directly targeting mitochondria. The mechanisms and the selective target sites that have been usually associated with the cytotoxic effects of arsenicals are discussed here with reference to their contribution towards the anticancer properties of arsenic. In this review we have particularly explained the in vivo or in vitro arsenic toxicity based on arsenic metabolic pathway and its different metabolites. These multiple effects and different selective target sites for arsenic and its metabolites emphasize the need for better understanding of paradoxical effects of arsenic which may provide the appropriate use of this agent in the treatment of various malignancies.