Recently, circRNAs have been found to play regulatory roles in cancer. In the present study, we aimed to investigate the characteristics and effect of circLMTK2, and its potential role as a novel biomarker in cases of gastric cancer (GC). About 111 pairs of clinical tissues from patients were collected for circLMTK2 expression investigation. Afterward, the relationship of circLMTK2 expression level and clinical features, such as survival, tumor size and so on, were analyzed, along with a multivariate Cox hazards analysis. Finally, malignant biological properties, like cell viability and mobility, were explored in cell line MGC-803. We found that circLMTK2 was a stable circRNA generated from the back-spliced Exon 10 and Exon 11 of the LMTK2 gene in GC cells. CircLMTK2 expression was significantly down-regulated in gastric carcinoma tissue specimens (P<0.001) compared with its expression in paired normal tissues. Furthermore, a Kaplan-Meier analysis revealed that lower levels of circLMTK2 expression were associated with decreased overall survival (OS) (P<0.001), and a multivariate Cox hazards analysis showed that high circLMTK2 expression was an independent factor for OS. Afterward, overexpression of circLMTK2 was performed in gastric cancer cell line MGC-803, and results indicated that malignant biological properties were inhibited by circLTMK2 overexpression. The present study showed the first evidence that circLMTK2 was down-regulated in GC, suggesting it as a novel biomarker for prognosis, and also as a therapeutic target in treatment of GC.