Transcriptional intermediary factor 1 gamma (TIF1 gamma) may play either a potential tumor-suppressor or -promoter role in cancer. Here we report on a critical role of TIF1 gamma in the progression of hepatocellular carcinoma (HCC). Reduced expression of TIF1 gamma was detected in HCC, especially in advanced HCC tissues, compared to adjacent noncancerous tissues. HCC patients with low TIF1 gamma expression had shorter overall survival times and higher recurrence rates than those with high TIF1 gamma expression. Reduced TIF1 gamma expression was an independent and significant risk factor for recurrence and survival after curative resection. In HCC cells, TIF1 gamma played a dual role: It promoted tumor growth in early-stage HCC, but not in advanced-stage HCC, whereas it inhibited invasion and metastasis in both early-and advanced-stage HCC. Mechanistically, we confirmed that TIF1 gamma inhibited transforming growth factor-beta/ Drosophila mothers against decapentaplegic protein (TGF-beta/Smad) signaling through monoubiquitination of Smad4 and suppressed the formation of Smad2/3/4 complex in HCC cells. TGF-beta-inducing cytostasis and metastasis were both inhibited by TIF1 gamma in HCC. We further proved that TIF1 gamma suppressed cyotstasis-related TGF-beta/Smad downstream c-myc down-regulation, as well as p21/cip1 and p15/ink4b up-regulation in early-stage HCC. Meanwhile, TGF-beta inducible epithelial-mesenchymal transition and TGF-beta/Smad downstream metastatic cascades, including phosphatase and tensin homolog deleted on chromosome ten down-regulation, chemokine (CXC motif) receptor 4 and matrix metalloproteinase 1 induction, and epidermal growth factor receptor-and protein kinase B-signaling transactivation, were inhibited by TIF1 gamma. In addition, we found that the down-regulation of TIF1 gamma in HCC was caused by hypermethylation of CpG islands in the TIF1 gamma promoter, and demonstrated that the combination of TIF1 gamma and phosphorylated Smad2 was a more powerful predictor of poor prognosis. Conclusion: TIF1 gamma regulates tumor growth and metastasis through inhibition of TGF-beta/Smad signaling and may serve as a novel prognostic biomarker in HCC.