Through silencing tumor suppressor genes, epigenetic changes can activate signaling pathways important to cancer development. In this report, we found an epigenetic contribution to the aberrant activation of wnt signaling in human gastric cancer. CXXC4 (CXXC finger protein 4) was identified as a novel target of EZH2 (enhancer of zeste homolog 2), and EZH2 promotes the activation of wnt signaling by downregulating CXXC4 expression. CXXC4 inhibits the growth of gastric cancer cells both in vitro and in vivo through inactivating wnt signaling. In contrast, depletion of CXXC4 activates wnt signaling and promotes the anchorage-independent growth of nontumor gastric epithelial cells. CXXC4 is downregulated in gastric carcinoma tissues and its downregulation is associated with poor outcome of gastric cancer patients (hazard ratio: 5.053, P < 0.05). Through its binding to dishevelled (Dvl), CXXC4 stabilizes the destruction complex of β-catenin to inhibit wnt signaling. Two critical amino acid residues in CXXC4, K161 and T162 were found to be important to its binding to Dvl and the growth inhibitory effect of CXXC4. In summary, EZH2 promotes the activation of wnt signaling in gastric carcinogenesis through the downregulation of CXXC4 expression. CXXC4 is a novel potential tumor suppressor directly regulated by EZH2, and its expression is a significant prognosis factor for patients with early stages of gastric cancer.