Whole-genome and transcriptome sequencing of non-small cell lung cancer (NSCLC) identified that DACH1, is a human homolog of drosophila gene dac, is involved in NSCLC. Here we showed that expression of DACH1 was significantly decreased in human NSCLC tissues and DACH1 abundance was inversely correlated with tumor stages and grades. Restoration of DACH1 expression in NSCLC cells significantly reduced cellular proliferation, clone formation, migration and invasion in vitro, as well as tumor growth in vivo. Unbiased screen and functional study suggested that DACH1 mediated effects were dependent in part on suppression of CXCL5. There was an inverse correlation between DACH1 mRNA levels and CXCL5 in both lung cancer cell lines and human NSCLC tissues. Kaplan-Mier analysis of human NSCLC samples demonstrated that high DACH1 mRNA levels predicted favorable prognosis for relapse-free and overall survival. In agreement, high CXCL5 expression predicted a worse prognosis for survival.