Apoptin is a small viral protein capable of inducing cell death selectively in cancer cells. Despite its potential as an anticancer agent, relatively little is known about its mechanism of toxicity and cancer-selectivity. Previous experiments suggest that cancer-selective phosphorylation modulates apoptin toxicity, although a lack of chemical tools has hampered the dissection of underlying mechanisms. Here, we describe structure–function studies with site-specifically phosphorylated apoptin (apoptin-T108ph) in living cells which revealed that Thr108 phosphorylation is the selectivity switch for apoptin toxicity. Mechanistic investigations link T108ph to actin binding, cytoskeletal disruption and downstream inhibition of anoikis-resistance as well as cancer cell invasion. These results establish apoptin as a protein pro-drug, selectively activated in cancer cells by phosphorylation, which disrupts the cytoskeleton and promotes cell death. We anticipate that this mechanism provides a framework for the design of next generation anticancer proteins with enhanced selectivity and potency.