Chemokine‐like factor (CKLF)‐like, MAL and related proteins for vesicle trafficking and membrane link (MARVEL) transmembrane domain‐containing family proteins (CMTMs) have significant roles in the immune system, in male reproduction, as well as in tumorigenesis. Previous studies have shown that CMTM family member 7 (CMTM7) was broadly expressed in various normal tissues, but not in lung, gastric, esophageal, pancreas, and cervix cancers. To explore its relationship with liver cancer, we examined the expression of CMTM7 in liver cancers and its correlation with clinical and pathological conditions. We found that CMTM7 expression was markedly reduced in liver cancer tissues, and negatively correlated with TNM staging and tumor metastasis. In vitro studies showed that enforced expression of CMTM7 inhibited the cell growth and migration of liver cancer cells. Further analysis revealed that CMTM7 suppressed AKT signaling and induced cell cycle arrest at the G0/G1 phase in the liver cancer cells, likely as the consequent of decreased levels of cyclin D1, cyclin‐dependent kinase 4 (CDK4), and CDK6, and increased p27 expression. Thus, CMTM7 functions as a tumor suppressor in liver cancer through suppressing cell cycle progression.