Background: Aberrant expression of circular RNAs contributes to the initiation and progression of cancers, but the underlying mechanism remains elusive. Methods: RNA-seq and qRT-PCR were performed to screen differential expressed circRNAs between gastric cancer tissues and adjacent normal tissues. Candidate circRNA (circMRPS35) was screened out and validated by qRT-PCR. Cell proliferation and invasion ability were determined by CCK-8 and cell invasion assays. RNA-seq, GO-pathway, RNA pull-down and ChIRP were further applied to search for detailed mechanism. Results: Here, a novel circRNA named circMRPS35, was screened out by RNA-seq in gastric cancer tissues, whose expression is related to clinicopathological characteristics and prognosis in gastric cancer patients. Biologically, circMRPS35 suppresses the proliferation and invasion of gastric cancer cells in vitro and in vivo. Mechanistically, circMRPS35 acts as a modular scaffold to recruit histone acetyltransferase KAT7 to the promoters of FOXO1 and FOXO3a genes, which elicits acetylation of H4K5 in their promoters. Particularly, circMRPS35 specifically binds to FOXO1/3a promoter regions directly. Thus, it dramatically activates the transcription of FOXO1/3a and triggers subsequent response of their downstream target genes expression, including p21, p27, Twist1 and E-cadherin, resulting in the inhibition of cell proliferation and invasion. Moreover, circMRPS35 expression positively correlates with that of FOXO1/3a in gastric cancer tissues. Conclusions: Our findings not only reveal the pivotal roles of circMRPS35 in governing histone modification in anticancer treatment, but also advocate for triggering circMRPS35/KAT7/FOXO1/3a pathway to combat gastric cancer.