Xanthine dehydrogenase (XDH), a rate-limiting enzyme involved in purine metabolism, has an essential role in inflammatory cascades. Researchers have known for decades that XDH activity is decreased in some cancers, including hepatocellular carcinoma (HCC). However, the role of XDH in cancer pathogenesis has not been fully explored. In this study, we showed that low XDH mRNA levels were correlated with higher tumor stages and poorer prognoses in patients with HCC. Knocking down or inhibiting XDH promoted migration and invasion but not proliferation of HCC cells. The abovementioned phenotypic changes are dependent on increases in epithelial-mesenchymal transition marker gene expression and transforming growth factor-β-Smad2/3 signaling activity in HCC. XDH overexpression suppressed HCC cell invasion in vitro and in vivo. In addition, the expression and activity of XDH were associated with the expression of CSC-related genes, such as CD44 or CD133, in HCC cells. These data suggest that downregulated XDH expression may be a useful clinical indicator and contribute to the development and progression of HCC.