Accumulating evidence suggests that placenta-specific 8 (PLAC8) plays an important role in normal cellular process and human diseases, including multiple types of human tumors, and its role is highly relied upon in cellular and physiologic contexts. However, there are no reports on its expression profile and biological roles during lung cancer development. In the current study, both the clinical implications and biological effects of PLAC8 in lung cancer (LC) progression were investigated, and we identified and described the novel Krüppel-like factor 4 (KLF4)/PLAC8 regulatory pathway in cancer progression. Elevated PLAC8 levels were positively correlated with tumor size, histological grade, and tumor node metasis (TNM) stage, and LC patients with high PLAC8 expression suffered poor outcomes. In vitro and in vivo assays further revealed that endogenous PLAC8 promoted cell proliferation and tumor formation. We also found downregulated PLAC8 protein in several LC cell lines following the induction of KLF4, and immunohistochemistry analysis of LC tissues by microarray indicated a potential inverse correlation between PLAC8 and KLF4 expression. Luciferase reporter analysis and chromatin immunoprecipitation assays determined that KLF4 negatively regulated PLAC8 promoter activity via directly binding to the promoter region. Furthermore, the growth inhibition resulting from KLF4 overexpression was partially rescued by ectopic PLAC8 expression. Together, our data uncovered a previously unidentified role of PLAC8 as a central mediator in LC progression. PLAC8 was transcriptionally repressed by KLF4, and the novel KLF4/PLAC8 axis may act as a promising candidate target for LC diagnosis and therapy.