In this study, we evaluated the mutagenic and antimutagenic activities of carrageenan, a sulfated polysaccharide, and described its mode of action by using an Allium cepa assay. The results indicate that carrageenan is not mutagenic, rather it has significant chemopreventive potential that is mediated by both demutagenic and bio-antimutagenic activities. This compound can adsorb agents that are toxic to DNA and inactivate them. Additionally, carrageenan can modulate enzymes of the DNA repair system. The percentage of damage reduction ranged from 62.54 to 96.66%, reflecting the compound’s high efficiency in preventing the type of mutagenic damage that may be associated with tumor development. Based on these findings and information available in the literature, we conclude that carrageenan is an important fiber that should be considered as a possible base for functional foods and/or diets with potential anticancer activity.