Homeobox genes are a family of transcription factors that play a pivotal role in embryogenesis. Prospero homeobox 1 (PROX1) has been shown to function as a tumor suppressor gene or oncogene in various types of cancer, including oral squamous cell carcinoma (OSCC). We have previously identified PROX1 as a downregulated gene in OSCC. The aim of this study is to clarify the underlying mechanism by which PROX1 regulates tumorigenicity of OSCC cells. PROX1 mRNA and protein expression levels were first investigated in 40 samples of OSCC and in nontumor margins. Methylation and amplification analysis was also performed to assess the epigenetic and genetic mechanisms involved in controlling PROX1 expression. OSCC cell line SCC9 was also transfected to stably express the PROX1 gene. Next, SCC9-PROX1-overexpressing cells and controls were subjected to proliferation, differentiation, apoptosis, migration, and invasion assays in vitro. OSCC samples showed reduced PROX1 expression levels compared with nontumor margins. PROX1 amplification was associated with better overall survival. PROX1 overexpression reduces cell proliferation and downregulates cyclin D1. PROX1-overexpressing cells also exhibited reduced CK18 and CK19 expression and transcriptionally altered the expression of WISP3, GATA3, NOTCH1, and E2F1. Our results suggest that PROX1 functions as a tumor suppressor gene in oral carcinogenesis.