Krüppel‐like factor 2 (KLF2) belongs to the zinc finger family and is thought to be a tumor suppressor gene due to its low expression in various cancer types. However, its functional role and molecular pathway involvement in colorectal cancer (CRC) are not well defined. Herein, we investigated the potential mechanism of KLF2 in CRC cell invasion, migration, and epithelial–mesenchymal transition (EMT). We utilized the TCGA and GEPIA databases to analyze the expression of KLF2 in CRC patients and its correlation with different CRC stages and CRC prognosis. RT‐PCR, western blot, and immunohistochemistry assays were used to measure KLF2 expression. Gain‐of‐function assays were performed to evaluate the role of KLF2 in CRC progression. Moreover, mechanistic experiments were conducted to investigate the molecular mechanism and involved signaling pathways regulated by KLF2. Additionally, we also conducted a xenograft tumor assay to evaluate the role of KLF2 in tumorigenesis. KLF2 expression was low in CRC patient tissues and cell lines, and low expression of KLF2 was associated with poor CRC prognosis. Remarkably, overexpressing KLF2 significantly inhibited the invasion, migration, and EMT capabilities of CRC cells, and tumor growth in xenografts. Mechanistically, KLF2 overexpression induced ferroptosis in CRC cells by regulating glutathione peroxidase 4 expression. Moreover, this KLF2‐dependent ferroptosis in CRC cells was mediated by inhibiting the PI3K/AKT signaling pathway that resulted in the suppression of invasion, migration, and EMT of CRC cells. We report for the first time that KLF2 acts as a tumor suppressor in CRC by inducing ferroptosis via inhibiting the PI3K/AKT signaling pathway, thus providing a new direction for CRC prognosis assessment and targeted therapy.