FXR is a member of the nuclear receptor superfamily and bile acids are endogenous ligands of FXR. FXR activation has recently been reported to inhibit intestinal inflammation and tumour development. This study aimed to investigate whether the novel FXR agonist nelumal A, the active compound of the plant Ligularia nelumbifolia, can prevent colitis and colorectal carcinogenesis. In a mouse colitis model, dextran sodium sulfate-induced colonic mucosal ulcer and the inflammation grade in the colon significantly reduced in mice fed diets containing nelumal A. In an azoxymethane/dextran sodium sulfate-induced mouse inflammation-related colorectal carcinogenesis model, the mice showed decreased incidence of colonic mucosal ulcers and adenocarcinomas in nelumal A-treated group. Administration of nelumal A also induced tight junctions, antioxidant enzymes, and FXR target gene expression in the intestine, while it decreased the gene expression of bile acid synthesis in the liver. These findings suggest that nelumal A effectively attenuates colonic inflammation and suppresses colitis-related carcinogenesis, presumably through reduction of bile acid synthesis and oxidative damage. This agent may be potentially useful for treatment of inflammatory bowel diseases as well as their related colorectal cancer chemoprevention.