This study was performed to elucidate the anticancer mechanism of a lipid-soluble ginseng extract (LSGE) by analyzing induction of apoptosis and arrest of cell cycle progression using the NCI-H460 human lung cancer cell line. Proliferation of NCI-H460 cells was potently inhibited by LSGE in a dose-dependent manner. The cell cycle arrest at the G0/G1 phase in NCI-H460 cells was induced by LSGE. The percentage of G0/G1 phase cells significantly increased, while that of S phase cells decreased after treatment with LSGE. The expression levels of cyclin-dependent kinase2 (CDK2), CDK4, CDK6, cyclin D3 and cyclin E related to G0/G1 cells progression were also altered by LSGE. In addition, LSGE-induced cell death occurred through apoptosis, which was accompanied by increasing the activity of caspases including caspase-8, caspase-9 and caspase-3. Consistent with enhancement of caspase activity, LSGE increased protein levels of cleaved caspase-3, caspase-8, caspase-9, and poly-ADP-ribose polymerase (PARP). These apoptotic effects of LSGE were inhibited by the pan-caspase inhibitor Z-VAD-fmk. These findings indicate that LSGE inhibits NCI-H460 human lung cancer cell growth by cell cycle arrest at the G0/G1 phase and induction of caspase-mediated apoptosis.