Muscle-invasive or metastatic bladder cancer (BCa) is associated with a very poor prognosis, and the underlying mechanism remains poorly understood. In this study, we demonstrate RASAL2, a RAS GTPase-activating protein (RAS GAP), acts as a tumor suppressor in BCa. First, RASAL2 was downregulated in BCa specimens and inversely correlated with pathological grades and clinical stages. Furthermore, we observed that RASAL2 could inhibit BCa stemness and epithelial–mesenchymal transition (EMT) based on our gain-of-function and loss-of-function experiments. Mechanistically, we found that mitogen-activated protein kinase/SOX2 signaling had a critical role for maintaining the stemness and mesenchymal properties of RASAL2-deficient BCa cells because inhibition of ERK activity or knockdown of SOX2 could reverse these phenotypes. Also, RASAL2 could inhibit BCa tumorigenesis and distant metastasis in vivo. Moreover, there was an inverse correlation between RASAL2 expression and the stemness/EMT status in subcutaneous xenograft and human BCa specimens. Taken together, our data indicate that RASAL2 is a tumor suppressor in BCa, and modulates cancer stemness and EMT for BCa recurrence and metastasis.