Recent evidence highlights the crucial regulatory roles of long noncoding RNAs (lncRNA) in tumor biology. In colorectal cancer (CRC), the expression of several lncRNAs is dysregulated and play essential roles in CRC tumorigenesis. However, the potential biological roles and regulatory mechanisms of the novel human lncRNA, CASC2 (cancer susceptibility candidate 2), in tumor biology are poorly understood. In this study, CASC2 expression was significantly decreased in CRC tissues and CRC cell lines, and decreased expression was significantly more frequent in patients with advanced tumor-node-metastasis stage disease (TNM III and IV) (P = 0.028). Further functional experiments indicate that CASC2 could directly upregulate PIAS3 expression by functioning as a competing endogenous RNA (ceRNA) for miR-18a. This interactions leads to the de-repression of genes downstream of STAT3 and consequentially inhibition of CRC cell proliferation and tumor growth in vitro and in vivo by extending the G0/G1-S phase transition. Taken together, these observations suggest CASC2 as a ceRNA plays an important role in CRC pathogenesis and may serve as a potential target for cancer diagnosis and treatment.