Fucoidan has many biological activities, including the inhibitory effect on the development of various cancer types. This study showed that lipopolysaccharide-induced inflammation in FHC cells (normal human colonic epithelial cells) could be reversed using fucoidan at different concentrations. The fucoidan-induced anti-inflammatory effect was also confirmed through in vivo experiments in mice. Compared to the mice of the model group, the ratio of Firmicutes/Bacteroidetes in feces increased and the diversity of gut microbial composition was restored in mice after fucoidan intervention. In colorectal cancer (CRC) cells DLD-1 and SW480, fucoidan inhibited cell proliferation and promoted cell apoptosis. It also blocked the cell cycle of DLD-1 and SW480 at the G0/G1 phase. The animal model of inflammation-related CRC showed that the incidence of tumors in mice was significantly reduced by fucoidan intervention. Furthermore, the administration of fucoidan decreased the expression levels of inflammatory factors such as TNF-α IL-6 and IL-1β in the colonic tissues. Therefore, fucoidan can effectively prevent the development of colitis-associated CRC.