An increasing number of studies have demonstrated the important role of microRNAs (miRNAs) in modulating cancer progression and metastasis, but the mechanisms by which miRNAs regulate prostate cancer (PCa) tumorigenesis remain poorly understood. In the present study, we found that miR-340 may act as a tumor suppressor based on our finding that it was significantly downregulated in PCa tumor tissues and cell lines. Moreover, the expression of miR-340 was found to be correlated with the inhibition of cell proliferation, migration and invasion in vitro, and had a suppressive effect on tumor growth in a xenograft mouse model as well. The suppressive effect of miR-340 overexpression was observed in cell lines DU145 and BPH-1 which express wild-type (WT) p53. However, in the p53-null PC-3 cell line, the suppressive effect was not found, indicating that miR-340 may play a critical role in the p53 pathway. Further investigation revealed that mouse double minute 2 (MDM2), an important regulator of p53, was targeted by miR-340 through the direct binding to the 3'UTR of MDM2, which inhibited MDM2 translation. In addition, miR-340 expression stabilized p53 protein levels which caused an increase in p21 expression but a decrease in the anti‑apoptotic protein, BCL-2, in the p53 WT cell lines. Moreover, the miR-340-mediated inhibition of cell progression was mitigated by re-expressing MDM2 in the stable miR‑340-overexpressing PCa cell line, which harbors WT p53. Our findings suggest that miR-340 may function as a novel tumor suppressor in PCa through the MDM2-p53 pathway by directly targeting MDM2, which may be a promising miRNA-targeted therapy for PCa.