IL-35 has recently been demonstrated to play significant roles in the progression of various malignant tumors. We investigated the expression of IL-35 in hepatocellular carcinoma (HCC) and the regulatory mechanisms in HCC progression. Tissue microarray from 75 HCC patients revealed that IL-35 was primarily localized in the cytoplasm of cancer cells and peri-tumoral hepatocytes. Quantitative analysis showed that IL-35 expression was significantly lower in patients in the advanced stages than in the early stages. Significantly lower expression of IL-35 was also observed in HCC patients with higher histological grades, larger tumor size, positive microvascular invasion and lymph node/distant metastasis. IL-35 over-expression in HepG2 cells significantly upregulated HLA-ABC and CD95, reduced activities of MMP-2 and MMP-9, and decreased cell migration, invasion and colony formation capacities. Our data indicated that decreased expression of IL-35 in tumor tissues might contribute to the progression of HCC, and IL-35 may serve as a new therapeutic target for HCC.