Insulin-like growth factor binding-protein-7 (IGFBP7) was obtained from our previous colonic adenocarcinoma (CRC) and normal mucosa suppression subtraction hybridization (SSH) cDNA libraries. By RT-PCR and immunohistochemistry, we found that IGFBP7 was overexpressed in CRC tissue compared to normal tissue. However, our in vitro experiments performed in 10 CRC cell lines showed that IGFBP7 expressed only in SW480 and Caco2 cell lines, which implied an underlying reversible regulatory mechanism. Using methylation-specific PCR (MSP) and bisulfite sodium PCR (BSP), we found that its expression was associated with DNA hypomethylation of exon1. This was further supported by the in vitro study which showed restored IGFBP7 expression after demethylation agent 5-aza-2'-deoxycytidine treatment. Correlation analysis between IGFBP7 expression and prognosis indicated that overexpression of IGFBP7 in CRC tissue correlated with favourable survival. Investigation of the functional role of IGFBP7 through transfection studies showed that IGFBP7 protein could inhibit growth rate, decrease colony formation activity, and induce apoptosis in RKO and SW620 cells, suggesting it a potential tumor suppressor protein in colorectal carcinogenesis. In conclusion, our study clearly demonstrated that IGFBP7 plays a potential tumor suppressor role against colorectal carcinogenesis and its expression is associated with DNA hypomethylation of exon 1.