Dapper homolog 1 (DACT1) is a disheveled partner in the planar cell polarity pathway. By using genome-wide promoter methylation screening, dapper homolog 1 (DACT1) was found to be frequently methylated in gastric cancer. We aim to clarify its epigenetic inactivation, biological function and clinical implication in gastric cancer. We demonstrated that DACT1 was silenced in 7 of 10 gastric cancer cell lines and in primary gastric cancers. Transcriptional gene silence of DACT1 was mainly regulated by promoter hypermethylation. Ectopic expression of DACT1 in silenced gastric cancer cell lines (AGS, BGC823 and MGC803) by stable transfection suppressed colony formation (P < 0.001), induced cell apoptosis (P < 0.01) and retarded tumorigenesis in nude mice (P < 0.001). The tumor suppressive effect of DACT1 was further confirmed by loss of DACT1 function experiment. The proapoptotic and antiproliferative effect by DACT1 was associated with inhibition of nuclear factor (NF)-κB activation and its downstream factors, including B-cell CLL/lymphoma-2, Bcl-X, interleukin-8 and tumor necrosis factor-α. Moreover, promoter methylation of DACT1 was detected in 29.3% (60/205) of primary gastric tumors. DACT1 methylation was significantly associated with tumor metastasis (P < 0.05), invasion (P < 0.05) and advanced tumor stage (P < 0.0005). These findings provided insight into the role of DACT1 as a novel functional tumor suppressor in gastric cancer through inhibiting NF-κB signaling pathway. Promoter methylation of DACT1 is associated with tumor aggressiveness.