Leucine-rich repeats and immunoglobulin-like domains 1 (LRIG1) is a pan-negative regulator of the epidermal growth factor receptor (EGFR) signaling pathway. The aim of this study was to investigate the underlying mechanism of LRIG1 in the regulation of vasculogenic mimicry (VM) formation in glioma cells. We constructed an enhanced green fluorescent protein plasmid (pEGFP) system, pEGFP-C1-LRIG1, for overexpression of LRIG1, and transfected it into human glioma cell line SHG-44. Under hypoxic conditions induced by CoCl2, we investigated the effects of LRIG1 overexpression on VM formation and VM-dependent malignant behaviors including migration, invasion, and proliferation. Additionally, we explored the effects of LRIG1 on the expression levels of major components of the EGFR/PI3K/AKT pathway as well as E-cadherin and vimentin. We found that LRIG1 overexpression is able to inhibit hypoxia-induced VM formation, migration, invasion, and proliferation. Furthermore, LRIG1 overexpression counteracts hypoxia-induced increase in the expression of phosphorylated EGFR (pEGFR), PI3K (pPI3K), and AKT (pAKT) and reverts hypoxia-induced alteration in E-cadherin and vimentin expression levels. In LRIG1 knockdown SHG-44 cells, however, hypoxia-induced VM formation and alteration in E-cadherin and vimentin expression levels were exacerbated. These results suggest that the inhibitory effects of LRIG1 are most likely mediated by suppression of the EGFR/PI3K/AKT pathway and epithelial-mesenchymal transition (EMT) process. Our findings provide compelling evidence implicating LRIG1 in glioma pathophysiology, suggesting that gene therapy using LRIG1 may serve as a treatment for this disease.