Increasing evidence has suggested that microRNAs (miRNAs) play an important role in the initiation and progression of hepatocellular carcinoma (HCC). Here, we identified a novel tumor suppressive miRNA, miR-377, and investigated its role in HCC. The expression of miR-377 in HCC tissues and cell lines was detected by real-time reverse-transcription PCR. The effects of miR-377 on HCC cell proliferation and invasion were also investigated. Western blot and luciferase reporter assay were used to identify the direct and functional target of miR-377. The expression of miR-377 was markedly downregulated in human HCC tissues and cell lines. MiR-377 can dramatically inhibit cell growth and invasion in HCC cells. Subsequent investigation revealed that T lymphoma invasion and metastasis 1 (TIAM1) was a direct and functional target of miR-377 in HCC cells. Overexpression of miR-377 impaired TIAM1-induced promotion of proliferation and invasion in HCC cells. Finally, miR-377 is inversely correlated with TIAM1 expression in human HCC tissues. These findings reveal that miR-377 functions as a tumor suppressor and inhibits the proliferation and invasion of HCC cells by targeting TIAM1, which may consequently serve as a therapeutic target for HCC patients.