Oesophageal cancer is a progressive tumour with high mortality. However, therapies aimed at treating oesophageal cancer remain relatively limited. Accumulating studies have highlighted long non‐coding RNA (lncRNA) HOX transcript antisense RNA (HOTAIR), microRNA‐204 (miR‐204) and homeobox C8 (HOXC8) in the progression of oesophageal cancer. Herein, we tried to demonstrate the function of HOTAIR, miR‐204 and HOXC8 in oesophageal cancer and their relationship. Differentially expressed genes involved in oesophageal cancer were identified. The endogenous expression of HOTAIR and miR‐204 in oesophageal cancer cell lines was altered to elucidate their effects and to identify the interaction among HOTAIR, miR‐204 and HOXC8. We also explored the underlying regulatory mechanisms of HOTAIR and miR‐204 with siRNA against HOTAIR, miR‐204 mimic or miR‐204 inhibitor. Cell proliferation, migration, invasion and apoptosis were subsequently detected. Xenograft in nude mice was induced to evaluate tumourigenicity. miR‐204 was down‐regulated, while HOTAIR and HOXC8 were up‐regulated in the oesophageal cancer tissues. HOTAIR could competitively bind to miR‐204 and miR‐204 could further target HOXC8. The oesophageal cancer cells treated with si‐HOTAIR or miR‐204 mimic exhibited decreased expression levels of HOXC8, Vimentin and MMP‐9, but increased E‐cadherin level. Silenced HOTAIR or elevated miR‐204 inhibited proliferation, migration and invasion, along with stimulated apoptosis of oesophageal cancer cells. In summary, our results show that lncRNA HOTAIR could specifically bind to miR‐204 as a competing endogenous RNA and regulate miR‐204 and HOXC8. Hence, down‐regulation of HOTAIR could inhibit progression of oesophageal cancer, indicating a novel target for oesophageal cancer treatment.