Hypoxia-induced factors (HIFs) play a central role in the adaptive mechanisms of cancer cells to survive under conditions of hypoxia. HIFs are regulated by prolyl hydroxylases (PHDs) among which PHD3 is implicated as a tumor suppressor. We aimed to correlate PHD3 expression with clinicopathologic parameters and to evaluate its prognostic significance in gastric cancer. The 101 tissue samples were collected from 83 resected stages I–IV gastric cancer patients, which were grouped as non-cancerous mucosa (n=18) and primary carcinoma (n=83). PHD3 expression was evaluated by immunohistochemistry. We adopted Pearson chi-square test, univariate analysis, multivariate analysis and Kaplan–Meier method. The positive frequency of PHD3 in cancer cells was 42.2%, whereas non-cancerous mucosa had no detectable PHD3. The expression of PHD3 increased significantly from non-cancerous mucosa to cancer. A significant difference was observed between PHD3 expression and tumor differentiation (P=0.007). The overexpression of PHD3 was associated with well differentiation. In univariate analyses, American Joint Committee on Cancer (AJCC) stage (P<0.0001), pT classification (P<0.0001), pN classification (P<0.0001), differentiation (P=0.0121), peritoneal metastasis (P=0.0006) and gross features (P=0.0104) were significantly associated with survival except PHD3 (P=0.2228) (Table 3). In multivariate analysis, AJCC stage was prognostically independent [hazard ratio (HR), 3.078; 95% confidence interval (CI), 2.228–4.252; P<0.0001]. Overexpression of PHD3 is a favorable prognosticator for gastric cancer. AJCC stage is an independent prognostic factor of gastric cancer.