Krüppel-like factor 4 (KLF4) is highly expressed in epithelial tissues such as the gut and skin. However, the role of KLF4 in human gastric cancer development and progression is unknown. Here we show that KLF4 protein expression was decreased or lost in primary tumors and, in particular, lymph node metastases when compared with that in normal gastric mucosa. Moreover, loss of KLF4 expression in the primary tumors was significantly associated with poor survival, and also an independent prognostic marker in a multivariate analysis. Consistently, most human gastric cancer cell lines exhibited loss of or a substantial decrease in KLF4 expression at both RNA and protein levels. Enforced restoration of KLF4 expression resulted in marked cell growth inhibition in vitro and significantly attenuated tumor growth and total abrogation of metastasis in an orthotopic animal model of gastric cancer. Mechanism studies indicated that promoter hypermethylation and hemizygous deletion contributed to the down-regulation of KLF4 expression and the induction of apoptosis contributed to the antitumor activity of KLF4. Collectively, our data provide first clinical and casual evidence and potential mechanism that the alteration of KLF4 expression plays a critical role in gastric cancer development and progression.