Inactivation of tumour suppressor genes by promoter methylation plays an important role in the initiation and progression of gastric cancer (GC). Transmembrane 106A gene (TMEM106A) encodes a novel protein of previously unknown function. This study analysed the biological functions, epigenetic changes and the clinical significance of TMEM106A in GC. Data from experiments indicate that TMEM106A is a type II membrane protein, which is localized to mitochondria and the plasma membrane. TMEM106A was down-regulated or silenced by promoter region hypermethylation in GC cell lines, but expressed in normal gastric tissues. Overexpression of TMEM106A suppressed cell growth and induced apoptosis in GC cell lines, and retarded the growth of xenografts in nude mice. These effects were associated with the activation of caspase-2, caspase-9, and caspase-3, cleavage of BID and inactivation of poly (ADP-ribose) polymerase (PARP). In primary GC samples, loss or reduction of TMEM106A expression was associated with promoter region hypermethylation. TMEM106A was methylated in 88.6% (93/105) of primary GC and 18.1% (2/11) in cancer adjacent normal tissue samples. Further analysis suggested that TMEM106A methylation in primary GCs was significantly correlated with smoking and tumour metastasis. In conclusion, TMEM106A is frequently methylated in human GC. The expression of TMEM106A is regulated by promoter hypermethylation. TMEM106A is a novel functional tumour suppressor in gastric carcinogenesis.