Hepatocellular carcinoma (HCC) is one of the most common malignancies worldwide. In recent decades, long non-coding RNAs (lncRNAs) have attracted increasing attention and have been reported to play important roles in human cancers, making them ideal candidates for precise disease assessment and treatment. Our previous study found that the loss of linc00261 was significantly correlated with the malignant biological behaviors of HCC, particularly MVI, and serves as an excellent independent prognostic factor for recurrence-free survival. In this study, our in-depth research demonstrated that linc00261 inhibits epithelial-mesenchymal transition (EMT) in liver cancer cells, thereby suppressing migration, invasion, and the formation of lung metastatic lesions. Moreover, linc00261 and its neighbor gene FOXA2 were positively correlated in HCC, the gain- and loss-of-function analyses indicated that linc00261 transcriptionally promotes the expression of FOXA2. Additionally, bioinformatic analysis and rescue assays confirmed that linc00261 partially suppresses migration, invasion, and EMT by upregulating FOXA2 expression. Molecular mechanism studies showed that linc00261 transcriptionally upregulates FOXA2 in cis by recruiting SMAD3. Finally, we identified EZH2 is responsible for linc00261 transcription repression via modulating trimethylation of H3K27 at Lys27 (H3K27Me3), both EZH2 and H3K27Me3 were negatively correlated with linc00261 expression in HCC. In conclusion, these findings demonstrated a crucial role of linc00261 in HCC metastasis, and that EZH2/linc00261/FOXA2 axis might reveal potential prognostic factors and be applied as therapeutic targets for HCC metastasis.