Ganoderma lucidum (G. lucidum) polysaccharides (GLPs) have been used as traditional Chinese medicine for cancer prevention for many years. However, the mechanism by which GLP exerts its chemopreventive activities remains elusive. In addition, it is unclear whether sporoderm-broken spores of G. lucidum water extract (BSGLWE), which contains mainly GLPs, has anticancer effects on colorectal cancer. The present study investigated the anticancer effects and potential mechanisms of BSGLWE on colorectal cancer in vivo and in vitro. Our results showed that BSGLWE significantly inhibited colorectal cancer HCT116 cell viability in a time- and dose-dependent manner. Flow cytometry analysis indicated that BSGLWE disrupted cell cycle progression at G2/M phase via downregulation of cyclin B1 and cyclin A2, and upregulation of P21 at mRNA levels. Moreover, BSGLWE induced apoptosis by decreasing Bcl-2 and survivin at mRNA levels, and reduced Bcl-2, PARP, pro-caspase-3 and pro-caspase-9 at protein levels. Furthermore, BSGLWE suppressed tumor growth in vivo by regulating the expression of genes and proteins associated with cell cycle and apoptosis, which was further confirmed by a reduction of Ki67, PCNA, and Bcl-2 expression as determined by immunohistochemistry staining. NSAID activated gene-1 (NAG-1), a pro-apoptotic gene, was significantly upregulated in vivo and in vitro upon BSGLWE treatment at both mRNA and protein levels. In addition, the relative amounts of secreted NAG-1 in cell culture medium or serum of nude mice were all upregulated upon BSGLWE treatments, suggesting a role of NAG-1 in BSGLWE-induced anticolorectal cancer activity. This is the first study to show that BSGLWE inhibits colorectal cancer carcinogenesis through regulating genes responsible for cell proliferation, cell cycle and apoptosis cascades. These findings indicate that BSGLWE possesses chemopreventive potential in colorectal cancer which may serve as a promising anticancer agent for clinical applications.