MicroRNAs are known to be important in a variety of cancer types. The specific expression and roles of miR-338-3p in the context of gastric cancer, however, remains largely unknown. In this study, we found that miR-338-3p was expressed significantly lower in established/primary human gastric cancer cells than that in human gastric epithelial cells; miR-338-3p is also decreased in human gastric cancer tissues and was positively associated with the worse prognosis of patients with gastric cancer. Enforced expression of miR-338-3p could inhibit cell growth, survival, and proliferation, while inducing cell apoptosis. In addition, miR-338-3p negatively regulated SOX5 expression through directly binding to the 3′-untranslated region of SOX5, and an inverse correlation was found between miR-338-3p and SOX5 messenger RNA expression in gastric cancer tissues. Furthermore, miR-338-3p-induced inactivation of Wnt/β-catenin signaling was greatly abrogated by SOX5 upregulation. Finally, we found that hypoxic conditions were linked with reduced miR-338-3p expression in the context of gastric cancer. In conclusion, miR-338-3p acts as a tumor suppressor in gastric cancer, possibly by directly targeting SOX5 and blocking Wnt/β-catenin signaling. These findings might provide novel therapeutic targets for gastric cancer.