Gastric cancer (GC) is the fourth most common diagnosed cancer and the second leading cause of cancer death worldwide. Phellinus igniarius is a traditional medicinal mushroom used in China and other countries of East Asia for the treatment of various diseases including cancer. The aim of this study is to evaluate the antitumor activity of P. igniarius and elucidate the possible mechanism. MTT assay displayed that the total ethanol extract of P. igniarius (TPI) had antitumor activities against five human tumor cell lines of HepG-2, AGS, SGC-7901, Hela and A-549. TPI was found the most cytotoxity against gastric cancer SGC-7901 in vitro, and strongly inhibited the tumor growth in xenograft nude mice in vivo. Typical morphological changes due to cell apoptosis including chromatin condensation, and nuclear fragmentation with the formation of apoptotic bodies were observed in the SGC-7901 cells after TPI treatment. TPI blocked SGC-7901 cell cycle at G₀/G₁ phase and caused apoptosis by down-regulated the expression of cyclin D1. TPI caused a remarkable collapse of mitochondrial membrane potential (MMP, △ψm) in SGC-7901 cells and induced the mitochondrial-dependent apoptosis by triggered the caspase-9, -3 activation and PARP cleavage. Moreover, TPI increased the ratio of Bax/Bcl-2 in SGC-7901 both in vitro and in vivo. These findings suggested that P. igniarius could be a potential natural derived therapeutic agent for the prevention and treatment of gastric cancer, as it could induce the cancer cell apoptosis through a mitochondria-dependent pathway.