DNA methylation at the 5 position of cytosine (5-mC) is a key epigenetic mark that is involved in various biological and pathological processes. 5-mC can be converted to 5-hydroxymethylcytosine (5-hmC) by the ten-eleven translocation (TET) family of DNA hydroxylases. Increasing evidence suggests that large-scale loss of 5-hmC is an epigenetic hallmark of several human cancers. However, the value of 5-hmC in diagnosis and prognosis of human cancers, including gastric cancer (GC), remains largely unknown. The aim of this study is to determine 5-hmC levels in GCs and explore its association with clinicopathological characteristics and clinical outcome of GC patients. Using immunohistochemistry (IHC) and dot-blot assays, we demonstrated that 5-hmC was dramatically decreased in GCs compared with matched normal tissues. We also found a strong link between decreased 5-hmC and the reduction of TET1 gene expression, but not TET2 or 3, suggesting that decreased TET1 expression might be one of the mechanisms underlying 5-hmC loss in GCs. Wilcoxon tests showed that 5-hmC content was significantly associated with most of clinicopathological characteristics, such as tumor size (P = 0.016), Bormman type (P < 0.0001), tumor invasion (P = 0.001), TNM stage (P < 0.0001), the number of lymph nodes metastasis (P = 0.002), and survival status (P < 0.0001). It is noteworthy that decreased 5-hmC was significantly associated with poor survival of GC patients. Collectively, our findings indicate that decreased 5-hmC may be crucial to the clinical pathology of GC and is a strong and independent poor prognostic factor in GCs.