Deregulation of Wnt/β-catenin pathway is a hallmark of major gastrointestinal cancers including hepatocellular carcinoma (HCC). The oncogenic role of β-catenin is well defined but reasons for its accumulation in HCC remain unclear. Dickkopf 4 (DKK4) acts as a negative regulator of Wnt/β-catenin pathway but its functional role in liver carcinogenesis has not been studied. We investigated the role of DKK4 in β-catenin regulation in HCC. Reduced expression of DKK4 was found in 47% (38/81) of HCC, as measured by quantitative real time PCR. Ectopic expression of DKK4 in two HCC cell lines, PLC/PRF/5 (PLC) and MHCC97L (97L), attenuated β-catenin responsive luciferase activity, and decreased both β-catenin and cyclin D1 protein levels. To study the effect of DKK4 on cell growth and tumourigenicity, two stable HCC cell lines were established from PLC and 97L cells. Functional assays demonstrated that overexpression of DKK4 hampered cell proliferation, reduced colony formation and retarded cell migration. When DKK4-expressing 97L stable cells were used to induce tumour xenografts in nude mice (n=8), reduction in tumour sizes was observed (P=0.027). Furthermore, immunohistochemical studies showed that decreased expression of DKK4 was associated with β-catenin accumulation in HCC tissues. Additionally, inhibition of the proteasome using specific inhibitor in DKK4-expressing 97L stable cells masked the effect of β-catenin. Our findings suggest a potential tumour suppressive role of DKK4 as well as that of an important regulator of HCC.