Conventional therapies for late‐stage colorectal cancer (CRC) have limited effects because of chemoresistance, recurrence, and metastasis. The “hidden” proteins/peptides encoded by long noncoding RNAs (lncRNAs) may be a novel resource bank for therapeutic options for patients with cancer. Here, lncRNA LOC90024 is discovered to encode a small 130‐amino acid protein that interacts with several splicing regulators, such as serine‐ and arginine‐rich splicing factor 3 (SRSF3), to regulate mRNA splicing, and the protein thus is named “Splicing Regulatory Small Protein” (SRSP). SRSP, but not LOC90024 lncRNA itself, promotes CRC tumorigenesis and progression, while silencing of SRSP suppresses CRC tumorigenesis. Mechanistically, SRSP increases the binding of SRSF3 to exon 3 of transcription factor Sp4, resulting in the inclusion of Sp4 exon 3 to induce the formation of the “cancerous” long Sp4 isoform (L‐Sp4 protein) and inhibit the formation of the “noncancerous” short Sp4 isoform (S‐Sp4 peptide), which lacks the transactivation domain. The upregulated SRSP level is positively associated with malignant phenotypes and poor prognosis in patients with CRC. Collectively, the findings uncover that a lncRNA‐encoded small protein SRSP induces “cancerous” Sp4 splicing variant formation and may be a potential prognostic biomarker and therapeutic target for patients with CRC.