DACT2 (Dapper, Dishevelled-associated antagonist of β-catenin homolog 2) is a member of the DACT family involved in the regulation of embryonic development. Human DACT2 is localized on 6q27, a region of frequent loss of heterozygosity in human cancers. However, the regulation of DACT2 expression and function in hepatocellular carcinoma (HCC) remains unclear. In this study, genetic and epigenetic changes of DACT2 were analyzed in HCC cell lines and primary cancer. We found no single-nucleotide polymorphism (SNP) associated with HCC. Promoter region methylation was correlated with loss or reduction of DACT2 expression, and restoration of DACT2 expression was induced by 5-aza-2'-deoxycytidine (5-AZA) in HCC cell lines. Promoter region methylation was found in 54.84% of primary HCC. Reduction of DACT2 expression was associated with promoter hypermethylation, and expression of DACT2 was inversely related to β-catenin expression in primary HCC. DACT2 suppressed cell proliferation, induced G 2-M arrest in cell lines and inhibited tumor growth in xenograft nude mice. The transcriptional activity of TCF-4 and the expression of Wnt signaling downstream genes were suppressed by DACT2 re-expression and reactivated by depletion of DACT2. In conclusion, DACT2 is frequently methylated in HCC and its expression is regulated by promoter hypermethylation. DACT2 suppresses HCC by inhibiting Wnt signaling in human HCC.