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Andrographolide is a diterpenoid compound isolated from Andrographis paniculata that exhibits anticancer activity. We previously reported that andrographolide suppressed v-Src-mediated cellular transformation by promoting the degradation of Src. In the present study, we demonstrated the involvement of Hsp90 in the andrographolide-mediated inhibition of Src oncogenic activity. Using a proteomics approach, a cleavage fragment of Hsp90α was identified in andrographolide-treated cells. The concentration- and time-dependent induction of Hsp90 cleavage that accompanied the reduction in Src was validated in RK3E cells transformed with either v-Src or a human truncated c-Src variant and treated with andrographolide. In cancer cells, the induction of Hsp90 cleavage by andrographolide and its structural derivatives correlated well with decreased Src levels, the suppression of transformation, and the induction of apoptosis. Moreover, the andrographolide-induced Hsp90 cleavage, Src degradation, inhibition of transformation, and induction of apoptosis were abolished by a ROS inhibitor, N-acetyl-cysteine. Notably, Hsp90 cleavage, decreased levels of Bcr-Abl (another known Hsp90 client protein), and the induction of apoptosis were also observed in human K562 leukemia cells treated with andrographolide or its active derivatives. Together, we demonstrated a novel mechanism by which andrographolide suppressed cancer malignancy that involved inhibiting Hsp90 function and reducing the levels of Hsp90 client proteins. Our results broaden the molecular basis of andrographolide-mediated anticancer activity.