Diatoms are photoautotrophic microalgae classified under class Bacillariophyceae, engulfed by hard silicate frustules, which give mechanical support and protection from bacterial infections. They exude polysaccharides extracellularly that help them with their gliding motion (locomotion). However, the bioactivity of such compounds was least explored from freshwater diatoms. In the present study, a single species of pennate diatom identified as Nitzschia palea was isolated and molecularly characterized by 18S rRNA smaller subunit gene (partial) sequencing and submitted to GenBank NCBI and accession number retrieved as ON360983. Based on logarithmic growth curve analysis, the exponential phase was obtained from 3rd to 4th day of diatom culture. The exopolysaccharide was extracted by the hot-water extraction method, and characterized by FT-IR. The total yield of exopolysaccharide from Nitzschia palea was estimated as 1.56 mg in 100 mL of culture after 7 days of incubation. The estimated carbohydrate content was 51.35 µg/100 µL. The monosaccharide constituents were determined by acid hydrolysis of exopolysaccharide, silylation (derivatization), followed by GC–MS analysis and tabulated. The extracted exopolysaccharide was evaluated for its anti-cancer potential against the Human Adenocarcinoma lung cancer cell line (A549) and the estimated IC50 value was 62.64 µg/mL. Acridine orange staining assay and DNA fragmentation assay also confirmed the apoptotic activity of exopolysaccharide derived from the diatom Nitzschia palea.