The antitumour activity of a medicinal mushroom Phellinus linteus (PL), through the stimulation of immune system or the induction of apoptosis, has been recently described. However, the molecular mechanisms responsible for the inhibition of invasive behaviour of cancer cells remain to be addressed. In the present study, we demonstrate that PL inhibits proliferation (anchorage-dependent growth) as well as colony formation (anchorage-independent growth) of highly invasive human breast cancer cells. The growth inhibition of MDA-MB-231 cells is mediated by the cell cycle arrest at S phase through the upregulation of p27(Kip1) expression. Phellinus linteus also suppressed invasive behaviour of MDA-MB-231 cells by the inhibition of cell adhesion, cell migration and cell invasion through the suppression of secretion of urokinase-plasminogen activator from breast cancer cells. In addition, PL markedly inhibited the early event in angiogenesis, capillary morphogenesis of the human aortic endothelial cells, through the downregulation of secretion of vascular endothelial growth factor from MDA-MB-231 cells. These effects are mediated by the inhibition of serine-threonine kinase AKT signalling, because PL suppressed phosphorylation of AKT at Thr(308) and Ser(473) in breast cancer cells. Taken together, our study suggests potential therapeutic effect of PL against invasive breast cancer.