Some types of long noncoding RNAs (lncRNAs) are aberrantly expressed in human diseases, including cancer. However, the overall biological roles and clinical significances of most lncRNAs in colorectal cancer (CRC) are not fully understood. First, The Cancer Genome Atlas (TCGA) was analyzed to identify differentially expressed lncRNAs between CRC tissues and noncancerous tissues. We identified that LINC02418 was highly expressed in CRC tissues and cell lines. Next, we evaluated the effect of LINC02418 on CRC tumorigenesis and its regulatory functions of absorbing microRNA and indirectly stimulating protein expression by acting as a ceRNA. Mechanistically, LINC02418 acted as a ceRNA to upregulate MELK expression by absorbing miR-1273g-3p. In addition, the diagnostic performance of cell-free LINC02418 and exosomal LINC02418 were both evaluated by the receiver operating characteristic curve and the area under the curve (AUC). Exosomal LINC02418 could distinguish the patients with CRC from the healthy controls (AUC = 0.8978, 95% confidence interval = 0.8644-0.9351) better than cell-free LINC02418 (AUC = 0.6784, 95% confidence interval = 0.6116-0.7452). Collectively, we determined that LINC02418 was significantly overexpressed in CRC and that the LINC02418-miR-1273g-3p-MELK axis played a critical role in CRC tumorigenesis. Finally, exosomal LINC02418 is a promising, novel biomarker that can be used for the clinical diagnosis of CRC.