Hereditary diffuse gastric cancer (HDGC), comprising 1%–3% of gastric malignances, has been associated with CDH1 variants. Accumulating evidence has demonstrated more than 100 germline CDH1 variant types. E-cadherin encoded by the CDH1 gene serves as a tumor suppressor protein. CDH1 promoter hypermethylation and other molecular mechanisms resulting in E-cadherin dysfunction are involved in the tumorigenesis of HDGC. Histopathology exhibits characteristic signet ring cells, and immunohistochemical staining may show negativity for E-cadherin and other signaling proteins. Early HDGC is difficult to detect by endoscopy due to the development of lesions beneath the mucosa. Prophylactic gastrectomy is the most recommended treatment for pathogenic CDH1 variant carriers. Recent studies have promoted the progression of promising molecular-targeted therapies and management strategies. This review summarizes recent advances in CDH1 variant types, tumorigenesis mechanisms, diagnosis, and therapy, as well as clinical implications for future gene therapies.