Bispecific antibodies have been exploited both as cancer immunodiagnostics and as cancer therapeutics, and have shown promise in several clinical trials in cancer imaging and therapy. A number of bispecific antibodies against B-cell markers have been shown to be effective in vitro in mediating tumor cell lysis and in vivo in inhibiting tumor growth in animal models. We have constructed a bispecific diabody from the variable genes encoding two hybridoma-derived monoclonal antibodies directed against human CD20 on B cells and CD3 on T cells. The anti-CD20 x anti-CD3 diabody was expressed in a single Escherichia coli host and purified by a one-step affinity chromatography. The bispecific diabody bound as efficiently to both CD20- and CD3-positive cells as the respective parental antibodies, and was capable of cross-linking CD20-positive tumor cells and human T lymphocytes as shown by cellular rosetting. The diabody effectively lysed human B-lymphoma cells in the presence of T-enriched human peripheral blood lymphocytes (PBL). Further, when combined with human PBL and interleukin-2, the diabody significantly prolonged the survival of nude mice inoculated with human B-lymphoma cells. Taken together, our results suggest that an anti-CD20 x anti-CD3 diabody may have significant clinical application in the treatment of human CD20-positive B-cell malignancies.