PTENP1 has been demonstrated to function as a tumor suppressor in several cancer cells. However, its expression and biological roles in gastric cancer (GC) have not yet been investigated. In this study, we demonstrated that PTENP1 was frequently decreased in GC tissues and cell lines, which might be partly associated with DNA hypermethylation, and lower PTENP1 expression was associated with larger tumor size, more advanced stage, deeper invasion depth and lymphatic metastasis. In addition, our data suggested that PTENP1 could regulate GC cell proliferation, apoptosis, migration and invasion in vitro. Furthermore, we demonstrated that PTENP1 could modulate the PTEN protein expression. Taken together, these results suggest that PTENP1 functions as a novel tumor suppressor in GC and its suppressive ability may be involved in the modulation of PTEN.