Tumor necrosis factor (TNF)-α-induced protein 8-like 2 (TNFAIP8L2, TIPE2) is a novel anti-inflammatory factor involved in maintaining immune homeostasis. Accumulating evidence has also shown that TIPE2 displays tumor-suppressive effects in several tumor types. Previous studies revealed that TIPE2 inhibits hepatocellular carcinoma metastasis by repressing Ral and Rac1 GTPases. However, its antimetastatic activity and underlying mechanism in other human cancers is largely unknown. We investigated TIPE2 in AGS, HGC-27 and SGC-7901 human gastric cancer cells compared with GES-1 normal human gastric mucous epithelial cells. We demonstrated that TIPE2 was expressed in GES-1 gastric mucous epithelial cells but lost in all three types of gastric cancer cells. We then performed a gain-of-function study by adenovirus-mediated TIPE2 overexpression (AdVTIPE2) and investigated the effects of TIPE2 on migration and invasion of AGS human gastric cancer cells. Wound healing and Transwell invasion assays showed that forced expression of TIPE2 markedly suppressed the gastric cancer cell migration and invasion in vitro. Mechanistically, TIPE2 remarkably reduced the total levels of pAKT, pGSK3β and β-catenin as well as the nuclear level of β-catenin in gastric cancer cells. The TIPE2-elicited antimetastatic effect in gastric cancer was closely associated with the inhibition of AKT signaling and enhancement of GSK3β activity followed by the degradation and decreased translocation to nucleus of β-catenin. These results provide the first compelling evidence that TIPE2 suppresses gastric cancer metastasis via downregulating β-catenin signaling through inhibiting AKT and activating GSK3β, indicating that TIPE2 is a promising therapeutic target for human gastric cancer metastasis.