Background In ulcerative early gastric cancer, improvement and exacerbation of ulceration repeat as a malignant cycle. Moreover, early gastric cancer combined with ulcer is associated with a low curative resection rate and high risk of adverse events. The aim of this study was to investigate the ulcer healing rate and clinical outcomes with the administration of a proton pump inhibitor before endoscopic submucosal dissection for differentiated early gastric cancer with ulcer. Methods A total of 136 patients with differentiated early gastric cancer with ulcer who met the expanded indications for endoscopic submucosal dissection were reviewed between June 2005 and June 2014. Eighty-one patients were given PPI before endoscopic submucosal dissection and 55 patients were not given PPI. Results The complete ulcer healing rate was significantly different between the two groups (59.3 % vs. 23.6 %, P \ 0.001). The procedure time was 38.1 ± 35.7 and 50.8 ± 50.2 min (P = 0.047). However, no significant differences were detected in the en bloc resection rate, complete resection rate, and adverse events including bleeding and perforation. Multivariate analysis showed that administration of PPI (OR = 10.83, P \ 0.001) and mucosal invasion (OR = 24.43, P \ 0.001) were independent factors that predicted complete healing of ulceration. The calculated accuracy for whether complete healing of the ulcer after PPI administration can differentiate mucosal from submucosal invasion was 75.3 %. Conclusions Administration of PPI before ESD in differentiated EGC meeting the expanded criteria is effective to heal the ulcer lesion and reduce the mean procedure time. Complete healing of the ulcer after PPI administration suggests mucosal cancer.