Luteolin is a naturally occurring flavonoid present in many plants with diverse applications in pharmacology. Despite several studies elucidating its significant anti-cancer activity against various cancer cells, the mechanism of action in skin cancer is not well addressed. Hence, we investigated the effects of luteolin in HaCaT (human immortalized keratinocytes) and A375 (human melanoma) cells. The radical scavenging abilities of luteolin were determined spectrophotometrically, prior to a cytotoxic study (XTT assay). Inhibitory effects were assessed by colony formation assay. Further, the capability of luteolin to induce cell cycle arrest and apoptosis were demonstrated by flow cytometry and cellular DNA fragmentation ELISA, respectively. The results revealed that luteolin possesses considerable cytotoxicity against both HaCaT and A375 cells with $IC_{50}$ values of 37.1 ${mu}M$ and 115.1 ${mu}M$, respectively. Luteolin also inhibited colony formation and induced apoptosis in a dose and time-dependent manner by disturbing cellular integrity as evident from morphological evaluation by Wright-Giemsa staining. Accumulation of cells in G2/M (0.83-8.14%) phase for HaCaT cells and G0/G1 (60.4-72.6%) phase for A375 cells after 24 h treatment indicated cell cycle arresting potential of this flavonoid. These data suggest that luteolin inhibits cell proliferation and promotes cell cycle arrest and apoptosis in skin cancer cells with possible involvement of programmed cell death, providing a substantial basis for it to be developed into a potent chemopreventive template for skin cancer.