The preparation, quantification, and characterization of flavonoid compounds from Chinese water chestnut peel (CWCP) flavonoid extract and ethyl acetate fraction (EF), n-butanol fraction, and water fraction were studied. Among these, EF showed the maximum free radical levels (IC50 values of 0.36, 0.40, and 0.37 mg/mL for DPPH•, ABTS•+ , and •OH, respectively), nitrite scavenging effects (IC50 = 1.89 mg/mL), and A549 cell inhibitory activities (IC50 = 776.12 μg/mL) with the highest value of total flavonoid content (TFC, 421.32 mg/g). Moreover, the contents of 8 flavonoids in this fraction were quantified using high-performance liquid chromatography, and fisetin, diosmetin, luteolin, and tectorigenin were the 4 major flavonoids with levels of 31.66, 29.91, 13.69, and 12.41 mg/g, respectively. Luteolin produced a greater inhibition of human lung cancer A549 cells (IC50 = 59.60 μg/mL) than did fisetin, diosmetin, and tectorigenin. Flow cytometry revealed that the cellular mechanisms of luteolin inhibition of A549 cells were achieved via the induction of cell proliferation arrest at G1 phase and apoptosis/necrosis. Our findings suggest that flavonoids are closely associated with antitumor, antioxidant, and nitrite scavenging effects of CWCP.