In animals ranging from fish to mice, the function of DACT2 as a negative regulator of the TGF-β/Nodal signal pathway is conserved in evolution, indicating that it might play an important role in human cancer. In this study, we showed that tumors with higher DACT2 protein level were correlated with better differentiation and better survival rate in patients with esophageal squamous cell carcinoma. Restored expression of DACT2 significantly inhibited growth, migration, and invasion of ESCC cells in vitro, and reduced tumorigenicity in vivo. Furthermore, when DACT2 expression was restored, the activity of TGF-β/SMAD2/3 was suppressed via both proteasome and lysosomal degradation pathways, leading to F-actin rearrangement that might depend on the involvement of cofilin and ezrin-redixin-moesin (ERM) proteins. Taken together, we propose here that DACT2 serves as a prognostic marker that reduces tumor cell malignancy by suppressing TGF-β signaling and promotes actin rearrangement in ESCC.