Introduction Gastric carcinoma (GC) remains a therapeutic challenge despite having many potent drugs to treat. Various studies emphasized the role of dysregulated Wnt/β-catenin pathway in cancer. In the present study, we examined the anti-cancer effect of Niclosamide and its effect on the dysregulated β-catenin pathway in human gastric carcinoma cell lines. Methods Cytotoxicity of compound to gastric cancer cell line was assessed by MTT cell viability assay, cell cycle analysis, and apoptosis assay was done using standard kits of Muse™ Cell Analyser. Reactive oxygen species (ROS) generation and mitochondrial membrane potential were analyzed by 2′,7′-Dichlorodihydrofluorescein diacetate (DCFDA) and tetraethylbenzimidazolylcarbocyanine iodide (JC-1) staining respectively. Protein expression studies were carried out by standard western blotting protocols. Results Niclosamide treatment resulted in a dose-dependent inhibition of viability of the gastric carcinoma cell-lines induced cell cycle arrest in the G0/G1 phase and strongly induced apoptosis in a concentration-dependent manner by downregulating Cyclin-D1 and CDK4 levels, critical proteins required for G1-S phase progression. DCFDA and JC-1 staining results indicated that Niclosamide enhanced intracellular ROS generation and disrupted mitochondrial membrane potential. Furthermore, niclosamide treatment decreased the expression of NF-KB, Bcl-2 and increased the expression of Bax protein. Niclosamide treatment significantly decreased the β-catenin mediated transcriptional activity and down-regulated β-catenin levels and its downstream proteins cyclinD1, CDK-4, and c-myc expression and also impeded Akt phosphorylation, a common internode in the Wnt and Akt/mTOR signaling in HGC-27 cells. Conclusion This study demonstrated that Niclosamide might become a promising therapeutic agent for the management of gastric cancer and further warrants its clinical trials in gastric cancer patients.