Colorectal cancer (CRC) is a common gastrointestinal malignancy. Long noncoding RNAs (lncRNAs) are associated with the progression of various cancers, including CRC. Herein, we explored the function of lncRNA LINC01550 in CRC. LINC01550 expression in CRC was analyzed using The Cancer Genome Atlas (TCGA). The diagnostic value of LINC01550 was evaluated using ROC curves. The relationship between clinicopathological variables and LINC01550 expression was explored, and its prognostic value was assessed using Kaplan–Meier and Cox regression analyses. The relationship between LINC01550 expression and immune cell infiltration was analyzed using CIBERSORT. Tumor‐associated mutations and drug sensitivity were compared between high and low LINC01550 expression groups. The effects of LINC01550 overexpression on CRC cells were investigated using CCK‐8, flow cytometry, wound healing, Transwell, qRT‐PCR, and western blot assays. LINC01550 was downregulated in CRC tissues, and the low expression of LINC01550 was correlated with advanced stage and metastasis. CRC patients with low LINC01550 expression had poorer overall survival. LINC01550 expression was an independent risk factor for CRC prognosis. APC and TP53 mutations were more frequent in the low LINC01550 expression group, while the high LINC01550 expression group was significantly more sensitive to 5‐fluorouracil, irinotecan, trametinib, gemcitabine, rapamycin, and XAV939. LINC01550 overexpression suppressed the proliferation, migration, invasion, and epithelial‐mesenchymal transition of HCT‐116 and HT‐29 cells and promoted apoptosis. LINC01550 exerted these effects by inhibiting Wnt/β‐catenin signaling. Our results suggest LINC01550 as a diagnostic and prognostic predictor in CRC that acts as a tumor suppressor and a potential therapeutic target.