The family of receptor tyrosine kinases EPH and their Ephrin ligands regulate cell proliferation, migration, and attachment. An important role in colorectal carcinogenesis is emerging for some of its members. In this study, we evaluate the role of EPHB4 in colorectal cancer and its value as a prognostic marker. EPHB4 levels were assessed by immunohistochemical staining of tissue microarrays of 137 colorectal tumors and aberrant hypermethylation of the EPHB4 promoter was investigated using methylation-specific PCR. We found that EPHB4 expression is frequently reduced or lost in colorectal tumors. Patients with low EPHB4 tumor levels had significantly shorter survival than patients in the high EPHB4 group (median survival, 1.8 and >9 years, respectively; P < 0.01, log-rank test), and this finding was validated using an independent set of 125 tumor samples. In addition, we show that EPHB4 promoter hypermethylation is a common mechanism of EPHB4 inactivation. Moreover, reintroduction of EPHB4 resulted in a significant reduction in the clonogenic potential of EPHB4-deficient cells, whereas abrogation of EPHB4 in cells with high levels of this receptor lead to a significant increase in clonogenicity. In summary, we identified EPHB4 as a useful prognostic marker for colorectal cancer. In addition, we provide mechanistic evidence showing that promoter methylation regulates EPHB4 transcription and functional evidence that EPHB4 can regulate the long-term clonogenic potential of colorectal tumor cells, revealing EPHB4 as a potential new tumor suppressor gene in colorectal cancer.