Iso-suillin, a natural product isolated from Suillus luteus, has been shown to inhibit the growth of some cancer cell lines. However, the molecular mechanisms of action of this compound are poorly understood. The purpose of this study was to investigate how iso-suillin inhibits proliferation and induces apoptosis in a human hepatoma cell line (SMMC-7721). We demonstrated the effects of iso-suillin on cell proliferation and apoptosis in SMMC-7721 cells, with no apparent toxicity in normal human lymphocytes, using colony formation assays and 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide (MTT) analysis. Western blotting was used to examine the expression of $G_1$ phase-regulated and apoptosis-associated protein levels in iso-suillin treated SMMC-7721 cells. The results indicated that iso-suillin significantly decreased viability, induced $G_1$ phase arrest and triggered apoptosis in SMMC-7721cells. Taken together, these results suggest the potential of iso-suillin as a candidate for liver cancer treatment.