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Derivatives of usnic acid (UA), a secondary metabolite from lichens, were synthesized to improve its anticancer activity and selectivity. Recently we reported the synthesis and activity of an UA isoxazole derivative, named <b>2b</b>, against cancer cells of different origins. Herein, the molecular mechanisms underlying its activity and efficacy in vivo were tested. The viability of breast cancer or normal cells has been tested using an MTT assay. Cell and organelle morphology was analyzed using light, electron and fluorescence microscopy. Gene expression was evaluated by RNAseq and protein levels were evaluated by Western blotting. In vivo anticancer activity was evaluated in a mice xenograft model. We found that <b>2b</b> induced massive vacuolization which originated from the endoplasmic reticulum (ER). ER stress markers were upregulated both at the mRNA and protein levels. ER stress was caused by the release of Ca²⁺ ions from the ER by IP3R channels which was mediated, at least partly, by phospholipase C (PLC)-synthetized 1,4,5-inositol triphosphate (IP3). ER stress led to cell death with features of apoptosis and paraptosis. When applied to nude mice with xenografted breast cancer cells, <b>2b</b> stopped tumour growth. In mice treated with <b>2b</b>, vacuolization was observed in tumour cells, but not in other organs. This study shows that the antiproliferative activity of <b>2b</b> relates to the induction of ER stress in cancer, not in healthy, cells and it leads to breast cancer cell death in vitro and in vivo.