BACKGROUND: ZIC1, a vital transcription factor with zinc finger domains, has been implicated in the process of neural development. We previously showed that ZIC1 may function as a tumour suppressor in gastrointestinal cancers. However, the molecular mechanism underlying ZIC1 participation in tumour progression remains unknown. METHODS: The role of ZIC1 on cell proliferation and migration was examined. The regulation of sonic hedgehog (Shh), phosphoinositide 3-kinase (PI(3)K) and mitogen-activated protein kinase (MAPK) signaling pathways after ectopic expression of ZIC1 in gastric cancer cells were evaluated. RESULTS: Overexpression of ZIC1 contributes to the inhibition of cell proliferation migration and cell-cycle distribution in gastric cancer. The modulation of G1/S checkpoint by ZIC1 is mainly mediated through the regulation of cyclin-dependent kinases (p21(Waf1/Cip1), p27(Kip1) and cyclin D1). In addition, ZIC1 can inactivate the level of phospholated Akt and Erk1/2, and transcriptionally regulate sonic hedgehog (Shh) signaling, thus leading to regulate the expression of p21(Waf1/Cip1) and cyclin D1. Finally, we have systemically identified ZIC1 downstream targets by cDNA microarray analysis and revealed that 132 genes are down-regulated and 66 genes are up-regulated after transfection with ZIC1 in gastric cancer cells. These candidate genes play critical roles in cell proliferation, cell cycle and cell motility. CONCLUSIONS: Overexpression of ZIC1 results in inactivation of Shh, PI(3)K and MAPK signaling pathways, as well as regulation of multiple downstream targets which are essential for the development and progression of gastric cancer. ZIC1 serves as a potential therapeutic target for gastric cancer.