Capsaicin possesses cytotoxic/anticancer activity and shares some common structural features, including a benzene ring and a long hydrophobic carbon tail, with the histone deacetylase (HDAC) inhibitors trichostatin A and suberoylanilide hydroxamic acid. The aims of this study were to investigate HDAC inhibitory and cytotoxic activities of a synthetic derivative of capsaicin, hydroxycapsaicin (6-hydroxy-N-(4-hydroxy-3-methoxybenzyl)-8-methylnonenamide), in colon cancer cell lines. Hydroxycapsaicin inhibited HDAC activity in vitro (IC 50 = 72 µM) much more effectively than the prototype capsaicin (IC 50 > 13.1 mM) and also exhibited HDAC inhibitory activity in human cells (HeLa cells). MTT assay demonstrated that hydroxycapsaicin was less toxic than capsaicin against both cancer and noncancer cells; however, hydroxycapsaicin, with greater HDAC inhibitory activity, was more effective than capsaicin at inducing apoptosis in colon cancer cell lines, especially in HCT116 cells. Hydroxycapsaicin appeared to induce less apoptotic cell death than capsaicin in Vero cells. Moreover, only hydroxycapsaicin induced S-phase cell-cycle arrest in both HT29 and HCT116 cells. The current study demonstrates that hydroxycapsaicin can act as a novel HDAC inhibitor, which would lead to a promising strategy for the development of safe and effective chemotherapeutic drugs from the abundant natural capsaicin of chili pepper.