Nardostachys chinensis (N. Chinensis) belonging to the family Valerianaceae have been used in traditional medicine to elicit stomachic and sedative effects. The present study investigated the effects of water extract of N. Chinensis in human lymphoma U937 cells. The proliferation of U937 cells was decreased by N. Chinensis. Anti-proliferative effect of N. Chinensis on U937 cells was associated with G0/G1 phase arrest, which was mediated by regulating the expression of p21 and p27 protein. In addition, the levels of CDK2, CDK4, CDK6, Cyclin D3, and Cyclin A were decreased, but Cyclin D1, Cyclin D2 and Cyclin E were essentially undetectable. N. Chinensis induced the differentiation of U937 as shown by increased expression of differentiation surface antigen CD11b, but not CD14. Taken together, these results demonstrated that N. Chinensis potently inhibits the proliferation of U937 cells via the G0/G1 phase cell cycle arrest in association with p21 and p27, and induces granulocytic differentiation.