Interleukin-24 (IL-24) is a unique IL-10 family cytokine that could selectively induce apoptosis in cancer cells without harming normal cells. Previous research demonstrated that intracellular IL-24 protein induces an endoplasmic reticulum (ER) stress response only in cancer cells, culminating in apoptosis. In this study, we developed a novel recombinant fusion protein to penetrate into cancer cells and locate on ER. It is composed of three distinct functional domains, IL-24, and the targeting domain of transactivator of transcription (TAT) and an ER retention four-peptide sequence KDEL (Lys-Asp-Glu-Leu) that link at its NH2 and COOH terminal, respectively. The in vitro results indicated that TAT-IL-24-KDEL inhibited growth in bladder cancer cells, as well as in non-small cell lung cancer cell line and breast cancer cell line, but the normal human lung fibroblast cell line was not affected, indicating the cancer specificity of TAT-IL-24-KDEL. Western blot analysis showed that apoptosis activation was induced by TAT-IL-24-KDEL through the ER stress-mediated cell death pathway. Treatment with TAT-IL-24-KDEL significantly inhibited the growth of human H460 xenografts in nude mice, and the tumor growth inhibition was correlated with increased hematoxylin and eosin (H&E) staining and terminal deoxynucleotidyl transferase-mediated dUTP nick end labeling (TUNEL) staining. These findings suggest that the artificially designed recombinant fusion protein TAT-IL-24-KDEL may be highly effective in cancer therapy and worthy of further evaluation and development.