The Pleckstrin and Sec7 domain-containing (PSD) gene has been recently found to participate in the progression of several types of cancer. In the present study, we identified PSD as a candidate tumor suppressor gene silenced through epigenetic modification in gastric cancer (GC). PSD mRNA expression and DNA methylation were evaluated by real-time reverse-transcriptase polymerase chain reaction (RT-PCR) and methylation-specific PCR in GC cell lines and tissue samples. Involvement of histone modification in GC cell lines was examined by chromatin immunoprecipitation assay. We also used an siRNA-mediated approach to knock down the PSD gene in SGC7901 cells, which was utilized to detect the role of PSD in GC progression, followed by analysis of cell apoptosis and invasion. PSD gene expression was reduced in all GC cell lines compared with GES1 (an immortalized normal gastric cell line). In addition, PSD expression was markedly downregulated in gastric carcinoma tissues when compared to adjacent non-tumor tissues. Our data also indicated that PSD mRNA and protein levels were associated with tumor differentiation and lymph node metastasis. Aberrant DNA methylation status and histone modification were also found in GC cell lines. Enhanced gene expression was detected when the HGC27, AGS and BGC823 GC cell lines were treated with the DNA-demethylating agent 5-aza-2'-deoxycytidine. However, treatment with trichostatin A, a histone deacetylase inhibitor, had no effect on PSD expression in any of the GC cell lines. Suppression of PSD by siRNA led to enhanced SGC7901 cell invasion. The depletion of PSD expression inhibited cell proliferation and decreased apoptosis in SGC7901 cell lines. Knockdown of the PSD expression decreased caspase-3 and -7 protein levels in SGC7901 cells. PSD gene may function as a tumor suppressor in GC suggesting a vital role for DNA methylation and histone modification in PSD silencing. PSD expression might be a useful biomarker for epigenetic-based GC early diagnosis and may lead to the identification of new targets for pharmacological intervention.