The tight junction (TJ) protein claudin-4 is aberrantly upregulated in gastric cancer, but its clinical significance and the molecular mechanisms underlying claudin-4 overexpression in gastric cancer remain unclear. Here, we investigated its roles and epigenetic mechanisms regulating CLDN4 expression in gastric cancer. We show that increased membranous expression of claudin-4 in gastric carcinoma is associated with better patient prognosis, whereas cytoplasmic claudin-4 expression did not show a significant association with prognosis. Consistent with the correlation of increased membranous claudin-4 with favorable clinicopathological factors, claudin-4 overexpression inhibited the migration and invasion of gastric cancer cells; in contrast, it did not affect cell growth. Claudin-4 expression also increased the barrier function of TJs. Claudin-4 upregulation was strongly correlated with DNA hypomethylation in both gastric tissues and gastric cancer cells. Moreover, CLDN4 expression was repressed in normal gastric tissues in association with bivalent histone modifications, and loss of repressive histone methylations and gain of active histone modifications were associated with CLDN4 overexpression in gastric cancer cells. Interestingly, CLDN4 repression could be markedly derepressed by combined treatments that simultaneously target both histone modifications and DNA demethylation in CLDN4-hypermethylated cells, whereas concomitant changes in histone methylations and acetylations are required for CLDN4 induction in CLDN4-repressed cells with low DNA methylation. Taken together, this study reveals that membranous claudin-4 expression is associated with gastric cancer progression and that it is an independent positive prognosis marker in gastric carcinoma. Furthermore, our findings suggest that epigenetic derepression may be a possible mechanism underlying CLDN4 overexpression in gastric cancer and that claudin-4 may have potential as a promising target for the treatment of gastric cancer.Laboratory Investigation advance online publication, 15 August 2011; doi:10.1038/labinvest.2011.117.