Increasing evidence indicates that microRNA (miR)-506 plays a vital role in tumorigenesis; however, the role of miR-506 in gastric cancer (GC) is unclear and needs further investigation. In the present study, we showed that the decrease in the expression of miR-506 is associated with tumor size, pathological tumor node metastasis (TNM) stage, and lymph node metastasis in 63 GC patient tumors. We found that patients with lower expression of miR-506 had a poor prognosis than that with the patients with high expression of miR-506. Notably, the ectopic expression of miR-506 was sufficient to inhibit cell proliferation, invasion, and epithelial-mesenchymal transition in the GC cells. Moreover, results from luciferase reporter assays identified miR-506 as a direct regulator of Yes-associated protein 1 (Yap1). Reintroduction of Yap1 rescues miR-506-induced effects on SGC-7901 cell proliferation and invasion. This function of miR-506/Yap1 axis is clinically significant, as the level of miR-506 is inversely correlated with Yap1 mRNA expression in matched tissues. Thus, our study demonstrates that miR-506 may act as a tumor suppressor in GC and that the miR-506/Yap1 axis may help us better understand the molecular mechanisms of GC progression.