Tumor suppressor genes play a key role in cancer pathogenesis. Through massive expression profiling we identified CHAC2 as a frequently downregulated gene in gastric and colorectal cancers. Immunohistochemistry and western blot revealed that CHAC2 was downregulated in most tumor tissues, and 3-year survival rate of patients with high CHAC2 expression was significantly higher than that of patients with low CHAC2 expression (P<0.001 and P=0.001, respectively). The data of univariate analysis and multivariate analysis suggested that CHAC2 could serve as an independent prognostic marker. Our results showed for the first time that CHAC2 was degraded by the ubiquitin-proteasome pathway and CHAC2 expression inhibited tumor cell growth, proliferation, migration in vitro and in vivo. Mechanistic study showed that CHAC2 induced mitochondrial apoptosis and autophagy through unfolded protein response. So in gastric and colorectal cancer CHAC2 acted as a tumor suppressor and might have therapeutic implication for patients.