THY1 was previously identified as a candidate tumor suppressor gene (TSG) associated with lymph node metastases in nasopharyngeal carcinoma (NPC) through functional studies. It was identified by oligonucleotide microarray analysis as an interesting differentially expressed gene. However, direct functional evidence is still lacking for THY1 being a TSG in NPC, as in vivo tumorigenicity assays have not been previously reported in our last study of THY1. In this study, a tetracycline-inducible expression vector, pETE-Bsd, was used to obtain stable transfectants of THY1. The stringent in vivo tumorigenicity assay results show that the activation of THY1 suppresses tumor formation of HONE1 cells in nude mice, and the tumor formation ability was restored in the presence of doxycycline (a tetracycline analog), when the gene is shut off. Functional inactivation of this gene is observed in all the tumors derived from the tumorigenic transfectant. The tumor suppressive effect could be repressed by knockdown of THY1 expression in nontumorigenic microcell hybrids. Further studies indicate that expression of THY1 inhibits HONE1 cell growth in vitro by arresting cells in G(0)/G(1) phase. It greatly reduces the ability for anchorage-independent growth. The invasiveness of HONE1 cells was also inhibited by the expression of THY1. These findings suggest that THY1 is a TSG in NPC, which is involved in invasion and shows an association with tumor metastasis. Taken together, THY1 clearly plays an important functional role in tumor suppression in NPC.