Deleted in liver cancer (DLC1) is a candidate tumor suppressor gene recently isolated from human hepatocellular carcinoma. Structurally, DLC1 protein contains a conserved GTPase-activating protein for Rho family protein (RhoGAP) domain, which has been thought to regulate the activity of Rho family proteins. Previous studies indicated that DLC1 was frequently inactivated in cancer cells. In the present study, we aimed to characterize the tumor suppressor roles of DLC1 in hepatocellular carcinoma. We showed that DLC1 significantly inhibited cell proliferation, anchorage-independent growth, and in vivo tumorigenicity when stably expressed in hepatocellular carcinoma cells. Moreover, DLC1 expression greatly reduced the motility and invasiveness of hepatocellular carcinoma cells. With RhoGAP-deficient DLC1 mutant (DLC1-K714E), we showed that the RhoGAP activity was essential for DLC1-mediated tumor suppressor function. Furthermore, the 292– to 648–amino acid region and the steroidogenic acute regulatory related lipid transfer domain played an auxiliary role to RhoGAP and tumor suppressor function of DLC1. Taken together, our findings showed that DLC1 functions as a tumor suppressor in hepatocellular carcinoma and provide the first evidence to support the hypothesis that DLC1 suppresses cancer cell growth by negatively regulating the activity of Rho proteins.