Magnolol, a small-molecule hydroxylated biphenol, isolated from the root and stem bark of Magnolia officinalis, has been shown to possess antiproliferative effect on various cancer cell lines. In the current study, we found that magnolol potently inhibited proliferation and induced apoptosis in MCF-7 human breast cancer cells. Further mechanistic studies revealed that induction of apoptosis is associated with cell cycle arrest at G2/M phase, increased generation of reactive oxygen species (ROS), reduced mitochondrial membrane potential (MMP), release of cytochrome c (Cyto c) and apoptosis inducing factor (AIF) from mitochondria to cytosol, upregulation of Bax, p21 and p53, and down-regulation of Bcl-2, cyclin B1 and cyclin-dependent kinase 1 (CDK1). Our findings indicated that magnolol induced apoptosis in MCF-7 cells via the intrinsic pathway with release of AIF from mitochondrial and G2/M phase arrest pathway. Therefore, magnolol might be a potential lead compound in the therapy of breast cancer.