Homeobox D10 (HoxD10 ) gene plays a critical role in cell differentiation and morphogenesis during development. However, the function of HoxD10 in tumor progression remains largely unknown. We demonstrate that the expression of HoxD10 is commonly downregulated in gastric cancer tissues (n = 33) and cell lines (n = 8) relative to normal stomach tissues. Functionally, reexpression of HoxD10 results in significant inhibition of cell survival, induction of cell apoptosis, and impairment of cell migration and invasion. Moreover, ectopic expression of HoxD10 suppresses gastric tumor growth in a mouse xenograft model. To identify target candidates of HoxD10, we performed cDNA microarray and showed that HoxD10 regulates multiple downstream genes including IGFBP3. Reintroduction of HoxD10 transcriptionally upregulates IGFBP3, activates caspase 3 and caspase 8, and subsequently induces cell apoptosis. Methylation specific PCR revealed that HoxD10 promoter DNA was hypermethylated in gastric cancer cell lines. Additionally, 5-aza demethylation treatment could transiently reactivate the expression of HoxD10 in gastric cancer cells. HoxD10 promoter methylation frequently was detected in gastric cancer tissues obtained from endoscopic biopsies (85.7%, 24/28) and surgically resected samples (82.6%, 57/69). Intestinal metaplasia tissues showed a 60% methylation rate (18/30), but no detectable methylation in normal stomach tissues (0%, 0/10). Taken together, our results suggest that HoxD10 functions as a candidate tumor suppressor in gastric cancer, which is inactivated through promoter hypermethylation.