Purpose: The purpose of this study was to determine the objective response rate (ORR) following treatment of canine mast cell tumors (MCT) with toceranib phosphate (Palladia, SU11654), a kinase inhibitor with both antitumor and antiangiogenic activity through inhibition of KIT, vascular endothelial growth factor receptor 2, and PDGFRβ. Secondary objectives were to determine biological response rate, time to tumor progression, duration of objective response, health-related quality of life, and safety of Palladia. Experimental Design: Dogs were randomized to receive oral Palladia 3.25 mg/kg or placebo every other day for 6 weeks in the blinded phase. Thereafter, eligible dogs received open-label Palladia. Results: The blinded phase ORR in Palladia-treated dogs ( n = 86) was 37.2% (7 complete response, 25 partial response) versus 7.9% (5 partial response) in placebo-treated dogs ( n = 63; P = 0.0004). Of 58 dogs that received Palladia following placebo-escape, 41.4% (8 complete response, 16 partial response) experienced objective response. The ORR for all 145 dogs receiving Palladia was 42.8% (21 complete response, 41 partial response); among the 62 responders, the median duration of objective response and time to tumor progression was 12.0 weeks and 18.1 weeks, respectively. Palladia-treated responders scored higher on health-related quality of life versus Palladia-treated nonresponders ( P = 0.030). There was no significant difference in the number of dogs with grade 3/4 (of 4) adverse events; adverse events were generally manageable with dose modification and/or supportive care. Conclusions: Palladia has biological activity against canine MCTs and can be administered on a continuous schedule without need for routine planned treatment breaks. This clinical trial further shows that spontaneous tumors in dogs are good models to evaluate therapeutic index of targeted therapeutics in a clinical setting.