Anticancer bioactive peptide (ACBP) was extracted from goat spleens with immunization by human gastric cancer extracts. ACBP was biochemically purified and identified as approximately 8,000 Da peptide. Here we report that ACBP significantly inhibited the growth of human gastric cancer line BGC-823 in vitro in a dose-dependent manner. ACBP induced BGC-823 cell apoptosis was observed morphologically both by light microscopy and electronic microscopy; and ACBP-induced apoptosis and G0/G1 cell cycle arrest were quantified by Annexin V-FITC/PI staining and flow cytometry. At the molecular level, ACBP induced p16Ink4, p21Waf1, p27Kip1, and bax tumor suppressor and apoptotic gene expression, as well as inhibited cyclin D1, c-myc, and bcl-2 gene expression that promote tumorigenesis. In vivo, ACBP dramatically inhibited human gastric tumor growth in a xenograft model with no apparent cytotoxicity to host. Our study suggests that ACBP could be a powerful anticancer biological product through induction of cell apoptosis and cell cycle arrest.