Hepatocellular carcinoma (HCC) is the third leading cause of cancer-related deaths worldwide and its prognosis is poor. Novel targets for treating recurrence and progression along with associated biomarkers are urgently required. In this study, the expression and regulatory mechanism of DENN/MADD domain containing 2D (DENND2D) were investigated in an attempt to identify a tumor suppressor gene for HCC regulated by silencing through promoter hypermethylation. The levels of DENND2D expression in HCC cell lines and surgical specimens were determined using a quantitative polymerase chain reaction assay and the relationship between the expression levels of DENND2D mRNA and clinicopathological factors was evaluated. The expression and distribution of DENND2D were determined using immunohistochemistry. DNA methylation analysis was performed to determine the regulatory mechanisms of DENND2D expression in HCC. Most HCC cell lines (89%) and surgical specimens (78%) expressed lower levels of DENND2D mRNA compared with normal liver tissue. In contrast, there was no significant difference in the expression levels of DENND2D mRNA between normal tissues of HCC patients with and without cirrhosis. The expression patterns of DENND2D protein and mRNA were consistent. Patients with significantly lower levels of DENND2D mRNA in HCC tissues had remarkably earlier recurrences after hepatectomy and their prognosis worsened. The DENND2D promoter was methylated in eight out of nine HCC cell lines and DNA demethylation reactivated DENND2D mRNA expression. Hypermethylation of DENND2D was frequently detected in HCC tissues (75%) and was significantly associated with downregulation of DENND2D mRNA expression. DENND2D is a candidate tumor suppressor gene that is inactivated by promoter hypermethylation in patients with HCC and may serve as a novel biomarker of early recurrence of HCC.