Krüppel-like factor 4 (KLF4) is a zinc-finger protein that plays an important role in the progression of gastric carcinoma. The abnormal activation of β-catenin frequently occurs in gastric cancer and has been associated with the promotion of tumor growth, invasion and metastasis. However, the potential interaction between KLF4 and β-catenin during gastric cancer development is unknown. In this study, a lentiviral KLF4 expression vector was constructed and utilized to transfect the human gastric cancer cell lines, SGC-7901, BGC-823, MKN-28 and MKN-45. KLF4 and β-catenin expression levels were measured by quantitative real-time RT-PCR and western blot analysis. Cell proliferation, colony formation and invasive potential were determined in the KLF4-transfected gastric cancer cells. The expression of E-cadherin and matrix metallopeptidase 2 (MMP2) was determined by western blot analysis. The overexpression of KLF4 significantly inhibited the expression of β-catenin in the MKN-45 gastric cancer cells. The restored expression of KLF4 suppressed proliferation, colony formation and inhibited the invasion and metastatic properties of MKN-45 gastric cancer cells. Furthermore, the forced expression of KLF4 in gastric tumor cell lines restored E-cadherin expression and inhibited MMP2 expression. Consistent with the in vitro findings, the enforced expression of the KLF4 gene in MKN-45 gastric carcinoma cells by lentiviral vector-mediated gene transfer effectively suppressed tumor growth in vivo. Our results show that KLF4 inhibits β-catenin expression and regulates the β-catenin-mediated biological behaviors of gastric cancer cells. The modulation of KLF4 expression may represent a novel therapeutic approach for β-catenin-driven malignancies.