Gastric cancer (GC) is the third leading cause of cancer‐related death worldwide. Circular RNA circHIAT1 has been proved to play an antitumor role. We aimed to explore the function and mechanism of circHIAT1 in GC. MKN28 and MKN45 cells were transfected with PLCDH‐circHIAT1, miR‐21 mimic, and relative control. Cell viability and apoptosis were examined through Cell Counting Kit‐8 and flow cytometry, respectively. CircHIAT1 expression and other relative factors were tested through quantitative reverse transcription‐polymerase chain reaction and Western blot analysis, respectively. Our findings demonstrated that circHIAT1 was lowly expressed in GC tissues. After transfection with PLCDH‐circHIAT1 in MKN28 and MKN45 cells, cell viability was decreased, while the expression levels of p53 and p21 were raised, as well as apoptosis. Besides this, the epithelial‐mesenchymal transition process was inhibited by PLCDH‐circHIAT1 transfection. Mechanistically, miR‐21 expression was upregulated in GC tissues and could be negatively regulated by circHIAT1. Further experiments showed that the addition of miR‐21 mimic reversed the growth inhibition effects of circHIAT1 overexpression. Moreover, circHIAT1 inhibited the activation of phosphatase and tensin homolog/phosphatidylinositol 3 kinase/protein kinase B and extracellular signal‐regulated kinase signal pathways via downregulating miR‐21. CircHIAT1 functioned as a tumor inhibitor in GC cells through downregulating miR‐21, and could be a novel target for GC treatment.