Low-molecular-weight Fucoidan (Oligo-Fucoidan) is a sulfated polysaccharide that has a variety of biological effects and has also been shown to have beneficial health effects. However, the molecular mechanisms underlying the therapeutic effects of Oligo-Fucoidan in patients with cancer remain unclear. Using human colorectal cancer HCT116 cells with (p53+/+) or without (p53-/-) normal p53 expression, we found that Oligo-Fucoidan treatment reduces the occurrence of spontaneous DNA lesions. Etoposide induces double strand DNA breaks. Subsequent administration of Oligo-Fucoidan to etoposide-treated cells promotes p53 accumulation, p21 expression and significant decreases in ataxia-telangiectasia-mutated (ATM), checkpoint kinase 1 (Chk1) and γ-H2AX phosphorylation in p53+/+ cells compared with p53-/- cells. Similarly, co-administration of Oligo-Fucoidan with etoposide inhibits ATM, Chk1 and γ-H2AX phosphorylation, particularly in the presence of p53. Furthermore, Oligo-Fucoidan supplementation increases cancer cell death and attenuates the adverse effects induced by etoposide that decreases production of the pro-inflammatory cytokine IL-6 and chemokine CCL2/MCP-1. Importantly, Oligo-Fucoidan decreases the tumor-promoting M2 macrophages in microenvironment as well as collaborates with p53 and works in combination with etoposide to prevent HCT116 tumorigenicity. Our results first demonstrate that p53 enables Oligo-Fucoidan to effectively inhibit tumor progression, and Oligo-Fucoidan minimizes the side effects of chemotherapy and alters tumor microenvironment.