This prospectus relates to shares of common stock that may be sold by the selling stockholders identified in this prospectus. Of the 9,420,291 shares covered hereby, 7,246,377 are outstanding shares acquired by the selling stockholders and 2,173,914 are shares reserved for issuance by us in the event the selling stockholders exercise warrants to purchase shares of common stock. The shares issuable upon exercise of the warrants will become eligible for disposition by the selling stockholders under this prospectus only as the warrants are exercised. The selling stockholders acquired the shares offered by this prospectus in a private placement of our securities. We are registering the offer and sale of the shares to satisfy registration rights we have granted. We will not receive any of the proceeds from the sale of shares by the selling stockholders. We will receive proceeds from any cash exercise of warrants by the selling stockholders.

			Page
SUMMARY			1
RISK FACTORS			1
USE OF PROCEEDS			1
SELLING STOCKHOLDERS			2
PLAN OF DISTRIBUTION			5
LEGAL MATTERS			7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			7
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES			7
EXPERTS			7
WHERE YOU CAN FIND MORE INFORMATION			7

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different. This prospectus may only be used where it is legal to sell these securities. The information in this prospectus is only accurate as of the date of this prospectus, but the information may have changed since that date.

References in this prospectus to “we,” “us,” “our,” “our company” or “Sunesis” refer to Sunesis Pharmaceuticals, Inc. Sunesis, Tethering® and

, our logo, are registered trademarks of our company. All other trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners.

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the Commission, utilizing a “shelf” registration statement. The selling stockholders may from time to time sell their shares of our common stock in one or more transactions. You should read both this prospectus, including all documents incorporated herein by reference, together with additional information described under “Where You Can Find More Information.”

The registration statement that contains this prospectus, including the exhibits to the registration statement, contains additional information about us and the securities being offered under this prospectus. You should read the registration statement and the accompanying exhibits for further information. The registration statement and exhibits can be read and are available to the public over the Internet at the Commission’s website at www.sec.gov.

We are a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of novel, small molecule therapeutics for use in oncology and other unmet medical needs. We were incorporated in Delaware in February 1998 as Mosaic Pharmaceuticals, Inc., and we subsequently changed our name to Sunesis Pharmaceuticals, Inc.

We are registering for resale by the selling stockholders 7,246,377 shares of our common stock initially acquired directly from us in transactions exempt from the registration requirements of federal and state securities laws. In addition, we are registering for resale 2,173,914 shares of our common stock issuable upon exercise of warrants outstanding on the date hereof, as may be amended from time to time. We are also registering for resale any additional shares of common stock which may become issuable with respect to the shares of common stock issued by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration, which results in an increase in the number of outstanding shares of our common stock.

You should carefully consider the specific risks set forth under “Risk Factors” under Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2005 and under “Risk Factors” under Item 1A of Part II of our quarterly reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006, each of which are incorporated by reference in this prospectus, before making an investment decision.

We will not receive any of the proceeds from the sale of shares of our common stock in this offering. The selling stockholders will receive all of the proceeds from this offering. We will receive proceeds from any cash exercise of warrants by the selling stockholders. We will use any such proceeds for general corporate purposes, including capital expenditures and working capital.

In March 2006, we entered into a Common Stock and Warrant Purchase Agreement with the selling stockholders pursuant to which we issued to them, for an aggregate purchase price of approximately $45.3 million, 7,246,377 shares of our common stock and warrants to purchase up to 2,173,914 additional shares of our common stock. The purchase price for the common stock and the exercise price for the warrants is $6.21 per share. Investors in the financing paid an additional purchase price equal to $0.125 for each share of common stock underlying the warrants. All securities were sold in a private placement exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, by virtue of Section 4(2) and/or Regulation D promulgated thereunder as transactions not involving any public offering. In this prospectus, we refer to this private placement as the “2006 PIPE.” This prospectus covers the resale by the selling stockholders of the shares of common stock and the shares of common stock issuable upon exercise of the warrants that were issued in the 2006 PIPE. We are registering the offer and sale of the shares to satisfy registration rights we have granted.

The following table sets forth information with respect to the selling stockholders and the shares of common stock (which includes shares of common stock underlying warrants) beneficially owned by each selling stockholder that may be offered under this prospectus. The information is based on publicly available records as of the date of this prospectus. Because the selling stockholders may offer all or some portion of the common stock, no estimate can be given as to the amount of the common stock that will be held by the selling stockholders upon termination of this offering. For purposes of the table below, however, we have assumed that after termination of this offering none of the shares covered by this prospectus will be held by the selling stockholders. The following table sets forth, as of October 31, 2006, information regarding beneficial ownership of our capital stock by each selling stockholder.

Beneficial ownership is determined according to the rules of the Commission and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, and includes options and warrants that are currently exercisable or exercisable within 60 days. Shares of common stock subject to stock options and warrants currently exercisable or exercisable within 60 days of October 31, 2006 are deemed to be outstanding for computing the percentage ownership of the person holding these options and warrants and the percentage ownership of any group of which the holder is a member, but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, we believe the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

	Shares Beneficially Owned Prior to Offering			Shares to be Sold in the Offering	Shares Beneficially Owned After Offering
Name	Number	Percent		(1)	Number	Percent
Entities affiliated with Abingworth⁽²⁾	1,383,234	4.7	%	607,086	776,148	2.6	%
Entities affiliated with Alta Partners⁽³⁾	2,512,203	8.4		2,512,203	—	*
Entities affiliated with Baker Biotech⁽⁴⁾	1,465,378	5.0		1,465,378	—	*
Entities affiliated with BVF⁽⁵⁾	628,020	2.1		628,020	—	*
Entities affiliated with Deerfield⁽⁶⁾	2,093,398	7.0		2,093,398	—	*
Domain Public Equity Partners, L.P.⁽⁷⁾	1,046,699	3.5		1,046,699	—	*
The Board of Trustees of the Leland Stanford Junior University (SBST)⁽⁸⁾	20,808	*		20,808	—	*
Entities affiliated with Warburg Pincus⁽⁹⁾	3,868,421	13.1		1,046,699	2,821,722	9.6

(2)

Includes (i) 776,148 shares held by Abingworth Bioventures II SICAV (in liquidation), a Luxembourg registered investment company, and (ii) 466,989 shares and 140,097 shares issuable upon exercise of warrants held by Abingworth Bioequities Master Fund Ltd. All such warrants are immediately exercisable. William Knight, Paul Meyers, Karl U. Sanne, Jean Welter and Genevieve Blauen are the members of the Board of Liquidators, which has powers equivalent to a company’s board of directors. These individuals may be deemed to share dispositive and voting power over the shares owned by Abingworth Bioventures II SICAV (in liquidation). Joe Anderson, Michael Bigham, Stephen Bunting, David Leathers and Jonathan MacQuitty have dispositive and voting power over the shares owned by Abingworth Bioequities Master Fund Ltd. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Abingworth Bioventures II SICAV is Val des Bons Malades, 2121 Kirchberg, Luxembourg. The address of Abingworth Bioequities Master Fund Ltd. is c/o Bisys Hedge Fund Services (Ireland) LTD, One Georges Quay Plaza, 6th Floor, Dublin 2, Ireland.

(3)

Includes (i) 118,870 shares and 35,661 shares issuable upon exercise of warrants held by Alta BioPharma Partners III GmbH & Co. Beteiligungs KG, (ii) 1,769,975 shares and 530,992 shares issuable upon exercise of warrants held by Alta BioPharma Partners III, L.P. and (iii) 43,619 shares and 13,086 shares issuable upon exercise of warrants held by Alta Embarcadero BioPharma Partners III, LLC. All such warrants are immediately exercisable. Alta Partners III, Inc. provides investment advisory services to Alta BioPharma Partners III GmbH & Co. Beteiligungs KG, Alta BioPharma Partners III, L.P. and Alta Embarcadero BioPharma Partners III, LLC, which we refer to collectively as the Alta Funds. The managing directors of Alta BioPharma Management III, LLC (which is the general partner of Alta BioPharma Partners III, L.P. and the managing limited partner of Alta BioPharma Partners III GmbH & Co. Beteiligungs KG) and the managers of Alta Embarcadero BioPharma Partners III, LLC exercise sole dispositive and voting power over the shares owned by the Alta Funds. Certain principals of Alta Partners III, Inc., Jean Deleage, Alix Marduel, Farah Campsi, Edward Penhoet and Ed Hurwitz, are managing directors of Alta BioPharma Management III, LLC and managers of Alta Embarcadero BioPharma Partners III, LLC. These individuals may be deemed to share dispositive and voting power over the shares held by the Alta Funds. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Alta Partners III, Inc. and its affiliates is One Embarcadero Center, 37th Floor, San Francisco, California 94111.

(4)

Includes (i) 340,824 shares and 102,247 shares issuable upon exercise of warrants held by Baker Biotech Fund I, L.P., (ii) 700,754 shares and 210,227 shares issuable upon exercise of warrants held by Baker Brothers Life Sciences, L.P., (iii) 30,525 shares and 9,158 shares issuable upon exercise of warrants held by Baker Bros. Investments II, L.P., (iv) 34,383 shares and 10,315 shares issuable upon exercise of warrants held by Baker Bros. Investments, L.P. and (v) 20,728 shares and 6,217 shares issuable upon exercise of warrants held by 14159, L.P. All such warrants are immediately exercisable. Julian Baker and Felix Baker share dispositive and voting power over the shares owned by Baker Biotech Fund I, L.P., Baker Brothers Life Sciences, L.P., Baker Bros. Investments II, L.P., Baker Bros. Investments, L.P. and 14159, L.P. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Baker Bros. Investments, L.P. and its affiliates is 667 Madison Avenue, 17th Floor, New York, New York 10021.

(5)

Includes (i) 71,900 shares and 21,570 shares issuable upon exercise of warrants held by Biotechnology Value Fund II, L.P., (ii) 104,733 shares and 31,420 shares issuable upon exercise of warrants held by Biotechnology Value Fund, L.P., (iii) 30,419 shares and 9,126 shares issuable upon exercise of warrants held by Investment 10, L.L.C. and (iv) 276,040 shares and 82,812 shares issuable upon exercise of warrants held by BVF Investments, L.L.C. All such warrants are immediately exercisable. Mark Lampert is President of BVF Inc., which is a general partner of BVF Partners L.P., which is a general partner of Biotechnology Value Fund II, L.P. and Biotechnology Value Fund, L.P., the investment manager of Investment 10, L.L.C. and manager of BVF Investments, L.L.C. Mr. Lampert may be deemed to have dispositive and voting power over the shares owned by Biotechnology Value Fund II, L.P., Biotechnology Value Fund, L.P., Investment 10, L.L.C. and BVF Investments, L.L.C. Mr. Lampert disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Biotechnology Value Fund, L.P. and its affiliates is 900 N. Michigan Avenue, Suite 1100, Chicago, Illinois 60611.

(6)

Includes (i) 425,000 shares and 127,000 shares issuable upon exercise of warrants held by Deerfield International Limited, (ii) 323,306 shares and 99,092 shares issuable upon exercise of warrants held by Deerfield Partners, L.P., (iii) 560,000 shares and 167,000 shares issuable upon exercise of warrants held by Deerfield Special Situations Fund International, Ltd. and (iv) 302,000 shares and 90,000 shares issuable upon exercise of warrants held by Deerfield Special Situations Fund, L.P. James Flynn, investment manager of each of Deerfield International Limited, Deerfield Partners, L.P., Deerfield Special Situations Fund International, Ltd. and Deerfield Special Situations Fund, L.P. has dispositive and voting power over the shares owned by these funds. All such warrants are immediately exercisable. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Deerfield and its affiliates is 780 Third Avenue, 37th Floor, New York, New York 10017.

(7)

Includes 805,153 shares and 241,546 shares issuable upon exercise of warrants held by Domain Public Equity Partners, L.P., or DPEP. All such warrants are immediately exercisable. The sole general partner of DPEP is Domain Public Equity Associates, L.L.C. The managing members of Domain Public Equity Associates, L.L.C. are Nicole Vitullo and Domain Associates L.L.C. The managing members of Domain Associates, L.L.C. are James C. Blair, Brian H. Dovey, Jesse I. Treu, Kathleen K. Schoemaker, Robert J. More, Nicole Vitullo and Brian Halak. These individuals share dispositive and voting power over the shares owned by DPEP. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of Domain Public Equity Partners, L.P. is c/o Domain Associates, One Palmer Sq., Suite 515, Princeton, New Jersey 08542.

(8)

Includes 16,006 shares and 4,802 shares issuable upon exercise of warrants held by The Board of Trustees of the Leland Stanford Junior University (SBST). All such warrants are immediately exercisable. Martina Poquet, Josh Richter and Victoria VonSchell have dispositive and voting power over the shares owned by The Board of Trustees of the Leland Stanford Junior University (SBST). Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his or her pecuniary interest therein. The address of The Board of Trustees of the Leland Stanford Junior University (SBST) is c/o Stanford Management Company, 2770 Sand Hill Road, Menlo Park, California 94025.

(9)

Includes (i) 3,506,739 shares and 228,261 shares issuable upon exercise of warrants held by Warburg, Pincus Equity Partners, L.P., or WPEP, (ii) 109,214 shares and 12,077 shares issuable upon exercise of warrants held by Warburg, Pincus Netherlands Equity Partners I, C.V., or WP Netherlands I, (iii) 10,922 shares and 1,208 shares issuable upon exercise of warrants held by Warburg, Pincus Netherlands Equity Partners III, C.V., or WP Netherlands III, and (iv) for Mr. Leff only, 4 shares held by his family members. All such warrants are immediately exercisable. Warburg Pincus Partners, LLC, a subsidiary of Warburg Pincus & Co., is the sole general partner of WPEP, WP Netherlands I and WP Netherlands III. Warburg Pincus LLC manages WPEP, WP Netherlands I and WP Netherlands III. Mr. Leff, one of our directors, is a Partner of Warburg, Pincus & Co. and a Managing Director and Member of Warburg Pincus LLC. Charles R. Kaye and Joseph P. Landy are Managing General Partners of Warburg Pincus & Co. and Managing Members and Co-Presidents of Warburg Pincus LLC. Messrs. Kay, Landy and Leff may be deemed to have an indirect pecuniary interest in an indeterminate portion of the shares held by the Warburg Pincus entities. Each of these individuals disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. The address of Warburg Pincus and its affiliates is 466 Lexington Avenue, New York, New York 10017.

The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices.

The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

In connection with the sale of our common stock or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of the warrants.

The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement.

In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

We have advised the selling stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

Ernst & Young LLP, independent registered public accounting firm, has audited our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2005, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements are incorporated by reference in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

This prospectus, including the information we incorporate by reference, contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical fact, included in this prospectus regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “hope,” “intend,” “may,” “plan,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, in-licensing transactions, joint ventures or investments we may make. We do not assume any obligation to update any forward-looking statements.

Our certificate of incorporation and bylaws provide that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by the Delaware General Corporation Law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.

We have filed with the Commission a registration statement on Form S-3 under the Securities Act, of which this prospectus forms a part. The rules and regulations of the Commission allow us to omit from this prospectus certain information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. With respect to the statements contained in this prospectus regarding the contents of any agreement or any other document, in each instance, the statement is qualified in all respects by the complete text of the agreement or document, a copy of which has been filed as an exhibit to the registration statement.

We file reports, proxy statements and other information with the Commission under the Securities Exchange Act of 1934, as amended, or the Exchange Act. You may read and copy this information from the Public Reference Room of the Commission, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission also maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the Commission. The address of that website is www.sec.gov.

The Commission allows us to “incorporate by reference” the information we file with them which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the Commission will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the Commission under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, between the date of this prospectus and the termination of the offering:

We will furnish without charge to you, upon written or oral request, a copy of any or all of the documents incorporated by reference, including exhibits to these documents. You should direct any requests for documents to Eric H. Bjerkholt, Senior Vice President and Chief Financial Officer, Sunesis Pharmaceuticals, Inc., 341 Oyster Point Boulevard, South San Francisco, California 94080, telephone: (650) 266-3500.