The long noncoding RNA HOX transcript antisense RNA (HOTAIR) has been found to be overexpressed in many human malignancies and involved in tumor progression and metastasis. Although the downstream target through which HOTAIR modulates tumor metastasis is not well known, evidence suggests that microRNA-197 (miR-197) might be involved in this event. In the present study, the significance of HOTAIR and miR-197 in the progression of colorectal cancer was detected in vitro and in vivo. We found that HOTAIR expression was significantly increased in colorectal cancer cells and tissues. In contrast, the expression of miR-197 was obviously decreased. We further demonstrated that HOTAIR knockdown promoted apoptosis and inhibited cell proliferation, migration, and invasion in vitro and in vivo. Moreover, HOTAIR modulated the progression of colorectal cancer by competitively binding miR-197. Taken together, our study has identified a novel pathway through which HOTAIR exerts its oncogenic role and provided a molecular basis for potential applications of HOTAIR in the prognosis and treatment of colorectal cancer.