Cancer stem cells (CSCs) play a pivotal role in cancer relapse or metastasis. We investigated the CSC‐suppressing effect of nonsteroidal anti‐inflammatory drugs (NSAIDs) and the relevant mechanisms in colorectal cancer. We measured the effect of NSAIDs on CSC populations in Caco‐2 or SW620 cells using colosphere formation and flow cytometric analysis of PROM1 (CD133)⁺CD44⁺ cells after indomethacin treatment with/without prostaglandin E2 (PGE2) or peroxisome proliferator‐activated receptor γ (PPARG) antagonist, and examined the effect of indomethacin on transcriptional activity and protein expression of NOTCH/HES1 and PPARG. These effects of indomethacin were also evaluated in a xenograft mouse model. NSAIDs (indomethacin, sulindac and aspirin), celecoxib, γ‐secretase inhibitor and PPARG agonist significantly decreased the number of colospheres formation compared to controls. In Caco‐2 and SW620 cells, compared to controls, PROM1 (CD133)⁺CD44⁺ cells were significantly decreased by indomethacin treatment, and increased by 5‐fluorouracil (5‐FU) treatment. This 5‐FU‐induced increase of PROM1 (CD133)⁺CD44⁺ cells was significantly attenuated by combination with indomethacin. This CSC‐inhibitory effect of indomethacin was reversed by addition of PGE2 and PPARG antagonist. Indomethacin significantly decreased CBFRE and increased PPRE transcriptional activity and their relative protein expressions. In xenograft mouse experiments using 5‐FU‐resistant SW620 cells, the 5‐FU treatment combined with indomethacin significantly reduced tumor growth, compared to 5‐FU alone. In addition, treatment of indomethacin alone or combination of 5‐FU and indomethacin decreased the expressions of PROM1 (CD133), CD44, PTGS2 (cyclooxygenase 2) and HES1, and increased PPARG expression. NSAIDs could selectively reduce the colon CSCs and suppress 5‐FU‐induced increase of CSCs via inhibiting PTGS2 (cyclooxygenase 2) and NOTCH/HES1, and activating PPARG.