A new N-acetyl-D-glucosamine (GlcNAc) specific lectin was identified and purified from the fruiting body of the Australian indigenous mushroom Psathyrella asperospora. The functional lectin, named PAL, showed hemagglutination activity against neuraminidase treated rabbit and human blood types A, B and O, and exhibited high binding specificity towards GlcNAc, as well as mucin and fetuin, but not against asialofetuin. PAL purified to homogeneity by a combination of ammonium sulfate precipitation, chitin affinity chromatography and size exclusion chromatography, was monomeric with a molecular mass of 41.8 kDa, was stable at temperatures up to 55 °C and between pH 6-10, and did not require divalent cations for optimal activity. De novo sequencing of PAL using LC-MS/MS, identified 10 tryptic peptides that revealed substantial sequence similarity to the GlcNAc recognizing lectins from Psathyrella velutina (PVL) and Agrocybe aegerita (AAL-II) in both the carbohydrate binding and calcium binding sites. Significantly, PAL was also found to exert a potent anti-proliferative effect on HT29 cells (IC50 0.48 μM) that was approximately 3-fold greater than that observed on VERO cells; a difference found to be due to the differential expression of cell surface GlcNAc on HT29 and VERO cells. Further characterization of this activity using propidium iodine staining revealed that PAL induced cell cycle arrest at G2/M phase in a manner dependent on its ability to bind GlcNAc.