Astrocyte-elevated gene-1 (AEG-1) plays an important role in diverse cancers and its up-regulation is associated with poor survival of patients. However, the status of AEG-1 expression and its significance in gastric cancer are still unclear. In this study, the expression of AEG-1 was studied in different gastric cancer cell lines and gastric cancer tissues. Expression of AEG-1 was significantly higher in gastric cancer tissues than that in normal tissues. Overexpression of AEG-1 was found in 62.9% of gastric cancers and significantly associated with TNM stage and Ki-67 proliferation index (P < 0.01). For survival study, overexpression of AEG-1 was significantly associated with poor survival (P < 0.01). Further multivariate analysis suggested that AEG-1 overexpression was an independent prognostic factor for the disease. We demonstrated that inhibition of AEG-1 expression by specific siRNA clearly inhibited SGC-7901 cell growth and enhanced cell apoptosis (P < 0.01). Inhibition of AEG-1 reduced phosphorylation of AKT and glycogen synthase kinase (GSK)-3β (Ser 9) and decreased the level of β-catenin, lymphoid enhancer binding factor 1 (LEF1), and Cyclin D1. This indicated that AEG-1 may play a role in Wnt/β-catenin-mediated cancer progression. Taken together, overexpression of AEG-1 could be a useful prognostic factor in patients with gastric cancer. Targeted inhibition of AEG-1 may provide a novel therapeutic strategy for gastric cancer.