Long noncoding RNAs (lncRNAs) have emerged recently as major players in governing fundamental biological processes, and many of which are altered in expression and likely to have a functional role in tumorigenesis. Maternally expressed gene 3 (MEG3) is an imprinted gene located at 14q32 that encodes a lncRNA associated with various human cancers. However, its biological role and clinical significance in gastric cancer development and progression are unknown. In this study, to investigate the lncRNA MEG3 expression in gastric cancer, quantitative reverse-transcription polymerase chain reaction was conducted. We found that MEG3 levels were markedly decreased in gastric cancer tissues compared with adjacent normal tissues. Its expression level was significantly correlated with TNM stages, depth of invasion, and tumor size. Moreover, patients with low levels of MEG3 expression had a relatively poor prognosis. Furthermore, knockdown of MEG3 expression by siRNA could promote cell proliferation, while ectopic expression of MEG3 inhibited cell proliferation, promoted cell apoptosis, and modulated p53 expression in gastric cancer cell lines. By 5-aza-CdR treatment, we also observed that MEG3 expression can be modulated by DNA methylation. Our findings present that MEG3 downexpression can be identified as a poor prognostic biomarker in gastric cancer and regulate cell proliferation and apoptosis in vitro.