Armillaria mellea (Tricholomataceae) is a medicinal fungus symbiotic with Chinese medicinal herb “Tianma” (Gastrodia elata Blume). 17 compounds with the same sesquiterpenoid skeleton were isolated from mycelium of Armillaria mellea, among them, 7 compounds are novel. All 17 compounds were confirmed with anti-angiogenesis activity and strong cancer cell cytotoxic effect on human breast, lung and colon cancers, and leukemia. Among them, armillaridin showed potential effect on human non-small cell lung cancer. Armillaridin decreased the amounts of Cdk2, Cdk4, Cyclin D1 and Cyclin E that resulted in cell cycle arresting in G1 phase in H460 and A549 cells. It also induced apoptosis via activation of caspase 3 and 7 but not affected caspase 8 and 9. These effects might participate in cancer cell cytotoxicity of armillaridin. Besides, actin rearrangement and cytoskeleton alternation were visualized under confocal microscope after amillaridin treatment. Immunoblot assay revealed a suppression of Rho/cdc25-LIMK pathway by amillaridin. These results indicated that amillaridin disrupted actin rearrangement through inhibition of Rho/cdc25-LIMK pathway. Animal tests indicated that amillaridin dose-dependently inhibited in vivo angiogenesis and showed similar dose-dependent tumor regression in human H460 xenograft animals. Therefore, we anticipate to identify valuable leads from Armillaria mellea for development of new anticancer drug.