Gastric cancer (GC) is one of the most common malignancies in China. B-cell translocation gene 3 (BTG3) has been identified as a tumor suppressor in several tumors, but its role in GC remains unknown. This study aimed to detect the expression of BTG3 and its prognostic value in GC tissues and determine its function in the progression of GC. The expression of BTG3 was detected in GC cell lines and tissues by real-time RT-PCR, Western blot or immunohistochemistry. A series of in vitro and in vivo assays were performed to evaluate the effect of BTG3 on proliferation, migration and invasion of GC cells. B-cell translocation gene 3 was obviously down-regulated in GC tissues. Its expression was positively correlated with distant metastasis (P < 0.05). Patients with lower BTG3 expression had shorter overall survival time (P = 0.015). BTG3 suppressed the proliferation of GC cells in vitro and in vivo. It also inhibited migration and invasion of GC cells in vitro. Down-regulation of BTG3 is closely associated with proliferation, migration and invasion in GC. It may be a novel prognostic biomarker for GC patients.