The synthesis of indolo[2,3-b]quinoline derivatives containing guanidine, amino acid or guanylamino acid substituents as well as their in vitro evaluation for the cytotoxic and antifungal activity are reported. The influence of the guanidine group on the selective cytotoxic and hemolytic properties of indolo[2,3-b]quinoline was investigated. Most of the compounds displayed a high cytotoxic activity in vitro and two of the most promising compounds (3 and 12) exhibited a high selectivity between normal and cancer cell-lines. The cytotoxic activity of compound 3 was about 600-fold lower against normal fibroblasts than against A549 and MCF-7 cancer cell lines. Novel entities acted as the DNA-intercalators when tested using a DNA–methyl green assay but demonstrated zero or low hemolytic activity in comparison to their unsubstituted analogs. The mechanism of action was studied for guanidine derivatives 3 and 12 and both compounds were found to be very effective inducers of apoptosis.