Increasing long noncoding RNAs (lncRNAs) have been found to participate in regulating the progression of colorectal cancer (CRC), which is a common gastrointestinal malignancy. Here, the specific role and mechanisms of lncRNA LINC00294 were investigated in CRC. The expression levels of LINC00294, miR‐499a‐5p, and La‐related protein 4B (LARP4B) in CRC cells (HCT116 and SW620) and tissues were assessed by RT‐qPCR. The viability, proliferation, cell cycle, and apoptosis of HCT116 and SW620 cells were determined by CCK‐8, EdU, and flow cytometry assays. Protein levels of cell cycle and cell apoptosis markers were measured by western blot analysis. FISH assay was performed to evaluate the subcellular localization of LINC00294 in CRC cells. Luciferase reporter assay, RNA pull‐down assay, as well as RIP assay verified the interactions between miR‐499a‐5p and LINC00294 (or LARP4B). The xenograft model was established in mice to investigate the function of LINC00294 in vivo. LINC00294 presented a decreased expression level in CRC cells and tissues. LINC00294 overexpression suppressed the cell proliferative capacity, promoted cell cycle arrest, and induced cell apoptosis in CRC HCT116 and SW620 cells. LINC00294 interacted with miR‐499a‐5p, and miR‐499a‐5p targeted LARP4B. MiR‐499a‐5p was upregulated while LARP4B was downregulated in CRC cells. In rescue assays, LARP4B knockdown reversed the inhibition of LINC00294 overexpression on malignant phenotypes of HCT116 and SW620 cells. In the xenograft model, LINC00294 overexpression inhibited tumor growth in vivo. LINC00294 exerted an antitumor function in CRC by forming a LINC00294/miR‐499a‐5p/LARP4B regulatory network.