SRY-box containing gene 17 (SOX17) was reported to be indispensable for embryonic development and a candidate tumor suppressor gene which antagonizes the canonical WNT/β-catenin signaling pathway in colorectal cancer. In this study, we investigated the function and epigenetic regulation of SOX17 in human hepatocellular carcinoma (HCC). DNA methylation of SOX17 was analyzed in 62 human HCC tissues and HCC cell lines by MSP. A role as a tumor suppressor gene was evaluated by colony formation assay and regulation of WNT/β-catenin signal pathway by SOX17 was determined by IHC and luciferase reporter assay. DNA methylation of the SOX17 promoter region occurs in 82% of HCC tissues and is associated with nuclear accumulation of β-catenin. Restoration of SOX17 inhibits HepG2 colony formation and β-catenin/TCF-dependent transcription with the presence of HMG box in SOX17. In conclusion, SOX17 negatively regulates canonical WNT/β-catenin signaling pathway and inhibits human HCC cells growth, providing an explanation for the loss of expression by epigenetic mechanisms in these tumors.