Lion’s mane mushroom (Hericium erinaceus) grows faster and produces stronger cancer-fighting compounds when cultivated under specific LED light colors. In this study, blue LED light dramatically outperformed darkness and other wavelengths, producing the densest mycelium (0.344 g/cm²), the highest fresh biomass (6.75 g), and the largest growth increase (12.3%), while cutting full colonization time in half compared to no light. Even more striking, extracts from blue-light-grown mycelium showed the strongest anticancer activity, selectively inhibiting colon and liver cancer cells with IC₅₀ values as low as 114–134 µg/mL, while leaving healthy colon cells largely unaffected. Red and green light produced moderate benefits, but blue light consistently delivered the best combination of growth speed, density, and medicinal potency. The findings show that simply tuning LED lighting during cultivation can significantly amplify both yield and bioactivity of lion’s mane, offering growers and researchers a low-cost way to enhance its functional and therapeutic potential.