Located at the important tumor suppressor locus, 3p22, PLCD1 encodes an enzyme that mediates regulatory signaling of energy metabolism, calcium homeostasis and intracellular movements. We identified PLCD1 as a downregulated gene in aerodigestive carcinomas through expression profiling and epigenetic characterization. We found that PLCD1 was expressed in all normal adult tissues but low or silenced in 84% (16/19) gastric cancer cell lines, well correlated with its CpG island (CGI) methylation status. Methylation was further detected in 62% (61/98) gastric primary tumors, but none of normal gastric mucosa tissues. PLCD1 methylation was significantly correlated with tumor high stage. Detailed methylation analysis of 37 CpG sites at the PLCD1 CGI by bisulfite genomic sequencing confirmed its methylation. PLCD1 silencing could be reversed by pharmacological demethylation with 5-aza-2'-deoxycytidine, indicating a direct epigenetic silencing. Ectopic expression of PLCD1 in silenced gastric tumor cells dramatically inhibited their clonogenicity and migration, possibly through downregulating MMP7 expression and hampering the reorganization of cytoskeleton through cofilin inactivation by phosphorylation. Thus, epigenetic inactivation of PLCD1 is common and tumor-specific in gastric cancer, and PLCD1 acts as a functional tumor suppressor involved in gastric carcinogenesis.