Lung cancer is the leading cause of cancer-related mortality worldwide. Recently, accumulating data indicate that long noncoding RNAs (LncRNAs) function as novel crucial regulators of diverse biological processes, including proliferation and metastasis, in tumorigenesis. Lnc NONHSAT081507.1 (LINC81507) is associated with lung adenocarcinoma. However, its pathological role in non-small cell lung cancer (NSCLC) remains unknown. In our study we investigated the role of LINC81507 in NSCLC. The expression of LINC81507 was analyzed in 105 paired NSCLC tumor specimens and paired adjacent non-tumorous tissues from NSCLC patients by real-time quantitative PCR (RT-qPCR). Gain- and loss-of-function experiments were conducted to investigate the functions of LINC81507, miR-199b-5p and CAV1. Reduced expression of LINC81507 resulted in cell growth, proliferation, migration and epithelial-mesenchymal transition (EMT) in NSCLC cells, whereas ectopic overexpression of LINC81507 resulted in the opposite effects both in vitro and in vivo. Nuclear and Cytoplasmic fractionation assays showed LINC81507 mainly resided in cytoplasm. Bioinformatics analysis and dual-luciferase assays revealed that miR-199b-5p was a direct target of LINC81507 through binding Ago2. Mechanistic analysis demonstrated that miR-199b-5p specifically targeted the Caveolin1 (CAV1) gene, and LINC81507 inactivated the STAT3 pathway in a CAV1-dependent manner. Taken together, LINC81507 is decreased in NSCLC and functions as a sponge to miR-199b-5p to regulate CAV1/STAT3 pathway, which suggests that LINC81507 serve as a tumor suppressor and potential therapeutic target and biomarker for metastasis and prognosis in NSCLC.