Physochlaina physaloides (L.) G. Don is a Physochlaina species of the Solanaceae family and is cultivated extensively as a medicinal plant in Inner Mongolia, China. Its root extracts have been found to treat a variety of diseases, including cancer. The aim of this study is to isolate and identify the bioactive compounds of roots of Physochlaina physaloides (L.) G. Don, and elucidate their cytotoxic effects and related mechanisms. The ethyl acetate (EtOAc) and n-butanol (n-BuOH) components of crude root extract displayed marked cytotoxicity against Hep-G2 and HGC-27 cells. Two compounds—physochloside B and physochloside C—with new skeletons from the n-BuOH fraction and three known compounds (3−5) from the EtOAc fraction were isolated. The cell viability and flow cytometer assay showed that physochlosides B and C exhibited the strongest cytotoxicity of these compounds, including cell cycle blockage and apoptosis at the sub-G1 phase in HGC-27 and Hep-G2 cells, with less severe toxicity to normal cells (GES-1 and L02 cells). Based on the Western blotting results, physochlosides B and C suppressed β-catenin and p-GSK3β expression and downregulated cyclin D1 and C-myc, which are targets of the Wnt/β-catenin pathway, suggesting the involvement of Wnt/β-catenin pathway in the inhibition of HGC-27 and Hep-G2 cells. Above findings indicate a role of physochlosides B and C from Physochlaina physaloides (L.) G. Don roots in suppressing gastric and liver cancer cells.