To investigate the clinicopathological significance and underlying mechanism of microRNA-29b (miR-29b) in colorectal cancer (CRC), the role of miR-29b was investigated using in vivo and in vitro assays. Luciferase reporter assays were conducted to determine the association between miR-29b and the insulin-like growth factor 1 (IGF1) 3′ untranslated region (3′UTR). Chromatin immunoprecipitation (ChIP) assays were employed to assess the direct binding of interferon regulatory factor 1 (IRF1) to miR-29b. We found that interferon (IFN)-γ could induce miR-29b by recruiting IRF1 to binding sites in the miR-29b promoter. A low level of miR-29b was significantly associated with an aggressive phenotype. MiR-29b inhibited CRC cell growth and invasion. IGF1, an activator of PI3K/Akt signaling, was confirmed as a novel target of miR-29b. Moreover, miR-29b increased IRF1 expression, and the inhibition of miR-29b suppressed IFN-γ-induced apoptosis. We elucidated the potential signaling pathway, IFN-γ/IRF1/miR-29b/IGF1, and its implication for CRC tumorigenesis. A positive feedback loop between IRF1 and miR-29b may contribute to the sensitivity of CRC cells to IFN-γ. Targeting miR-29b may provide a strategy for blocking CRC growth and metastasis.