UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2011

SUNESIS PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (650) 266-3500

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2011 Compensation

On February 2, 2011, the Compensation Committee of our Board of Directors, or the Committee, approved a merit increase of approximately three percent to the base salaries of our named executive officers, effective February 16, 2011. Effective February 16, 2011, the base salaries for our named executive officers will be as follows:

2010 Bonus Awards

On February 2, 2011, the Committee approved the payment of cash bonuses to certain of our employees, including our named executive officers, pursuant to our 2010 Bonus Program, as previously described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2010.

Under the 2010 Bonus Program, each participant was eligible to receive a cash bonus in an amount up to a specified target percentage of such participant’s annual base salary for 2010 based on the level of achievement of certain corporate and individual objectives. The bonus payment amounts approved by the Committee were based on its determination of the degree to which such corporate and individual objectives were achieved.

A portion of the bonuses awarded to our named executive officers will consist of fully vested shares of our common stock granted under our 2005 Equity Incentive Award Plan, or the 2005 Plan, in order to minimize the associated cash expense of the payouts. The bonus payment amounts for each of our named executive officers and the portion thereof to be paid in cash and shares of our common stock are as follows:

The cash bonus payments will be made and the stock awards will be granted effective as of February 28, 2011. The number of shares of our common stock awarded to each of our named executive officers under the 2005 Plan will be determined based on the closing price of our common stock as quoted on the NASDAQ Capital Market on February 28, 2011, rounded down to the nearest whole share.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.