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CPT-11, also known as irinotecan, is a prodrug that is approved for the treatment of advanced colorectal cancer. The active metabolite of CPT-11, SN38 (7-ethyl-10-hydroxy-camptothecin), has 100- to 1000-fold more potent cytotoxic activity in tissue cell culture compared with CPT-11. However, parental administration of SN38 is not possible because of its inherently poor water solubility. It is reported here that a multiarm poly(ethylene glycol) (PEG) backbone linked to four SN38 molecules (PEG-SN38) has been successfully prepared with high drug loading and significantly improved water solubility (400- to 1000-fold increase). Three different protecting strategies have been developed in order to selectively acylate the 20-OH of SN38 to preserve its E-ring in the lactone form (the active form of SN38 with cytotoxic activities) while PEG is still attached. One chemical process has been optimized to make a large quantity of the PEG-SN38 conjugate with a high yield that can be readily adapted for scale-up production. The PEG-SN38 conjugates have shown excellent in vitro anticancer activity, with potency similar to that of native SN38, in a panel of cancer cell lines. The PEG-SN38 conjugates also have demonstrated superior anticancer activity in the MX-1 xenograft mice model compared with CPT-11. Among the four conjugates, PEG-Gly-(20)-SN38 (23) has been selected as the lead candidate for further preclinical development.