Alexander Hamilton Underdown, 68, who had been associated with night clubs in Washington for many years, died of cancer Aug, 16 at the Veterans Administration Hospital here.

His latest venture was Alex's Bar and Lounge on 14th Street NW, which opened in 1978. Mr. Underdown, however, was forced to withdraw after about five months because of ill health.

He was born in Washington and attended Cardozo High School where he played football and basketball.

In the early 1940s, he was manager of the popular club, Dykes' Stockade.He then served with the U.S. Army in World War II seeing duty in the Pacific.

After the war, Mr. Underdown returned to Washington where he and a partner, Louis Murry, opened Louis and Alex's Supper Club on U Street NW. Later he was manager of such night clubs as The Casbah, Crystal Caverns, The Green Door and the 652 Club on Newton Street NW.

His marriage to the former Ada Scott ended in divorce.

Survivors include two daughters, Adela V. Watson of Memphis, Tenn., and Robbyn Tyler of Washington; a sister, Margaret Mitchell, and two brothers, Edward and Welker, all of Washington, and two grandchildren.

The family suggests that expressions of sympathy be in the form of contributions to the American Cancer Socitey.