Leucine-rich repeats and immunoglobulin-like domains (LRIG)-1 is a transmembrane protein that antagonizes epidermal growth factor receptor signaling in epithelial tissues. LRIG1 is down-regulated in various epithelial cancers, including bladder, breast, and colorectal cancer, suggesting that it functions as a tumor suppressor. However, its role in gastric carcinogenesis is not well understood. Here, we investigated the changes in LRIG1 expression during the stages of gastric cancer. We used a DMP-777–induced spasmolytic polypeptide-expressing metaplasia mouse model and a tissue array of human gastric cancer lesions. The effects of LRIG1 knockdown were also assessed using the human gastric cancer cell line SNU638 in a xenograft model. LRIG1 expression varied over the course of gastric carcinogenesis, increasing in spasmolytic polypeptide-expressing metaplasia lesions but disappearing in intestinal metaplasia and cancer lesions, and the increase was concurrent with the up-regulation of epidermal growth factor receptor. In addition, LRIG1 knockdown promoted the tumorigenic potential in vitro, which was manifested as increased proliferation, invasiveness, and migration as well as increased tumor size in vivo in the xenograft model. Furthermore, LRIG1 expression was determined to be a positive prognostic biomarker for the survival of gastric cancer patients. Collectively, our findings indicate that LRIG1 expression is closely related wto gastric carcinogenesis and may play a vital role as a tumor suppressor through the modulation of epidermal growth factor receptor activity.