Baicalein, a natural flavonoid, has fascinating anti-cancer properties in breast cancer. Long noncoding RNAs (lncRNAs), a class of transcripts with no protein-coding potential, also exhibit critical roles in breast cancer. However, the molecular mechanisms mediating the anti-cancer properties of baicalein and whether lncRNAs are involved in the anti-cancer effects are still unclear. In this study, we identified a novel isoform of lncRNA PAX8-AS1 (PAX8-AS1-N), which is activated by baicalein in a dose- and time-dependent manner. Functional assays showed that PAX8-AS1-N reduced cell viability, inhibited cell-cycle progression, and induced apoptosis of breast cancer cells in vitro. Depletion of PAX8-AS1-N promoted breast xenograft tumor growth in vivo. Furthermore, depletion of PAX8-AS1-N attenuated the suppressive roles of baicalein on cell viability, the apoptosis induced by baicalein, and also the suppressive roles of baicalein on tumor growth in vivo. Mechanistically, PAX8-AS1-N bound to miR-17-5p, and up-regulated miR-17-5p targets, such as PTEN, CDKN1A, and ZBTB4. In addition, PAX8-AS1-N was down-regulated in breast cancer and reduced expression of PAX8-AS1-N indicated poor survival of breast cancer patients. In conclusion, our results demonstrated that PAX8-AS1-N activation mediated the anti-cancer effects of baicalein via regulating miR-17-5p, and suggested that baicalein and enhancing PAX8-AS1-N would be potential therapeutic strategies against breast cancer.