Prolyl hydroxylase 3 (PHD3) is widely accepted as a tumor suppressor; however, the expression of PHD3 in various cancer types remains controversial. The present study aimed to investigate the association between PHD3 expression and the clinicopathological features of gastric cancer using reverse transcription‑quantitative polymerase chain reaction and immunohistochemistry. The effects of PHD3 in gastric cancer cell lines were assessed using western blot analysis and transwell migration assays. The present results revealed that PHD3 expression was increased in adjacent non‑cancerous tissue compared with in gastric cancer tissue, and PHD3 overexpression was correlated with the presence of well‑differentiated cancer cells, early cancer stage classification and the absence of lymph node metastasis. In vitro experiments demonstrated that PHD3 may act as a negative regulator of hypoxia‑inducible factor‑1α and vascular endothelial growth factor, both of which participate in tumor angiogenesis. In conclusion, the present results suggested that PHD3 may act as a tumor suppressor in gastric cancer. Therefore, the targeted regulation of PHD3 may have potential as a novel therapeutic approach for the treatment of patients with gastric cancer.