The caudal-type homeobox gene Cdx2 encodes a transcription factor which in adult mammals is expressed in the cells of the intestinal epithelium and is thought to play an important role in their proliferation and differentiation. Cdx2 mediates apoptosis and suppresses tumorigenesis in many tissue types, but there are few data available on Cdx2 expression and its relationship to tumor kinetics in gastric cancer. To gain better insight into the involvement of Cdx2 in the biological characteristics of gastric cancer, we investigated the effect of Cdx2 overexpression on the progression of gastric carcinoma cells. A gastric cancer cell line stably overexpressing Cdx2 (MGC-803/Cdx2) was established. The influence of Cdx2 overexpression on in vitro cell growth was assessed by measuring cell survival, colony formation and cell cycle progression. The results clearly showed that overexpression of Cdx2 significantly inhibited cell growth and proliferation, blocking entry into the S phase of the cell cycle. MGC-803/Cdx2 cells also had a higher apoptotic rate than control cells. In addition, Cdx2 reduced the motility and invasion of gastric cancer cells. In summary, Cdx2 overexpression can effectively inhibit gastric cancer progression and may be used as a potent therapy.