The peptide mimetic, NC114, is a promising anticancer compound that specifically kills colorectal cancer cells without affecting normal colon epithelial cells. In our previous study, we observed that NC114 inhibited the Wnt/β‐catenin pathway, with significant downregulation of both Ser 675‐phosphorylated β‐catenin and its target genes, cyclin D1 and survivin. However, the molecular mechanism responsible for its cytotoxic effect has not yet been fully characterized. In the present study, we demonstrated that NC114 prevented cell cycle progression from S to G2/M phase by downregulating cell cycle‐related gene expression, and also induced growth arrest in SW480 and HCT‐116 colorectal cancer cells. A novel covariation network analysis combined with transcriptome analysis revealed a series of signaling cascades affected by NC114 treatment, and identified protein kinase C‐δ (PKCδ) and forkhead box protein M1 (FOXM1) as important regulatory factors for NC114‐induced growth arrest. NC114 treatment inhibits the activation of PKCδ and its kinase activity, which suppresses MEK/ERK signaling. Attenuated MEK/ERK signaling then results in a reduction in FOXM1 phosphorylation and subsequent nuclear translocation of FOXM1 and β‐catenin. Consequently, formation of a T‐cell factor‐4 (TCF4)/β‐catenin transcription complex in the nucleus is inhibited and transcription of its target genes, such as cell cycle‐related genes, is downregulated. The efficacy of NC114 on tumor growth was confirmed in a xenograft model. Collectively, elucidation of the mechanism by which NC114 induces growth arrest in colorectal cancer cells should provide a novel therapeutic strategy for colorectal cancer treatment.