Glypican-5 (GPC5) is a member of the heparin sulfate proteoglycans. Previous studies of GPC5 in lung tumorigenesis showed conflicting results. In this study, we confirmed that GPC5 was downregulated in lung adenocarcinoma tissues compared with adjacent normal lung tissues. The low expression of GPC5 was significantly associated with poor outcome in lung adenocarcinoma. To understand the biological mechanism of the downregulation, we examined the promoter methylation status of GPC5 gene. We found that GPC5 was significantly hypermethylated in lung cancer tissues and lung cancer cell lines compared with normal lung tissues. The methylation level of GPC5 was negatively correlated with its transcriptional expression. De-methylation experiments further confirmed that the loss of GPC5 expression was regulated by its hypermethylation. Overexpression of GPC5 inhibited proliferation, migration and invasion of lung cancer cells in vitro, and repressed tumor growth in vivo, whereas knockdown of GPC5 was able to reverse the effect. Furthermore, we demonstrated that GPC5 could suppress the Wnt/β-catenin signaling by binding to Wnt3a at the cell surface, which mediated its function as a tumor suppressor. Overall, these findings demonstrate that GPC5 is a novel epigenetically silenced tumor suppressor, which inhibits tumor growth by suppressing Wnt/β-catenin signaling in lung adenocarcinoma. Our findings substantially expand our understanding about the role and the molecular mechanism of GPC5 in tumorigenesis of lung cancer.