We characterized the brominated alkaloid Isofistularin-3 (Iso-3), from the marine sponge Aplysina aerophoba, as a new DNA methyltransferase (DNMT)1 inhibitor. Docking analysis confirmed our in vitro DNMT inhibition data and revealed binding of Iso-3 within the DNA binding site of DNMT1. Subsequent increased expression of tumor suppressor gene aryl hydrocarbon receptor (AHR) could be correlated to decreased methylation of CpG sites within the essential Sp1 regulatory region of its promoter. Iso-3 induced growth arrest of cancer cells in G0/G1 concomitant with increased p21 and p27 expression and reduced cyclin E1, PCNA and c-myc levels. Reduced proliferation was accompanied by morphological changes typical of autophagy revealed by fluorescent and transmission electron microscopy and validated by LC3I-II conversion. Furthermore, Iso-3 strongly synergized with tumor-necrosis-factor related apoptosis inducing ligand (TRAIL) in RAJI [combination index (CI) = 0.22] and U-937 cells (CI = 0.21) and increased TRAIL-induced apoptosis via a mechanism involving reduction of survivin expression but not of Bcl-2 family proteins nor X-linked inhibitor of apoptosis protein (XIAP). Iso-3 treatment decreased FLIP L expression and triggered activation of endoplasmatic reticulum (ER) stress with increased GRP78 expression, eventually inducing TRAIL receptor death receptor (DR)5 surface expression. Importantly, as a potential candidate for further anticancer drug development, Iso-3 reduced the viability, colony and in vivo tumor forming potential without affecting the viability of PBMCs from healthy donors or zebrafish development.