Malformin C, a fungal cyclic pentapeptide, has been claimed to have anti-cancer potential, but no in vivo study was available to substantiate this property. Therefore, we conducted in vitro and in vivo experiments to investigate its anti-cancer effects and toxicity. Our studies showed Malformin C inhibited Colon 38 and HCT 116 cell growth dose-dependently with an IC50 of 0.27±0.07μM and 0.18±0.023μM respectively. This inhibition was explicated by Malformin C's effect on G2/M arrest. Moreover, we observed up-regulated expression of phospho-histone H2A.X, p53, cleaved CASPASE 3 and LC3 after Malformin C treatment, while the apoptosis assay indicated an increased population of necrotic and late apoptotic cells. In vivo, the pathological study exhibited the acute toxicity of Malformin C at lethal dosage in BDF1 mice might be caused by an acute yet subtle inflammatory response, consistent with elevated IL-6 in the plasma cytokine assay. Further anti-tumor and toxicity experiments proved that 0.3mg/kg injected weekly was the best therapeutic dosage of Malformin C in Colon 38 xenografted BDF1 mice, whereas 0.1mg/kg every other day showed no effect with higher resistance, and 0.9mg/kg per week either led to fatal toxicity in seven-week old mice or displayed no advantage over 0.3mg/kg group in nine-week old mice. Overall, we conclude that Malformin C arrests Colon 38 cells in G2/M phase and induces multiple forms of cell death through necrosis, apoptosis and autophagy. Malformin C has potent cell growth inhibition activity, but the therapeutic index is too low to be an anti-cancer drug.