Hepatocellular carcinoma (HCC), which accounts for 85-90% of primary liver cancer, is one of the most prevalent cancers and ranks as the second leading cause of cancer-related mortality worldwide. Hepatocarcinogenesis is a complicated and long-term process that involves progressive accumulation of genetic and epigenetic changes, resulting in deregulation of multiple cancer-associated genes such as oncogenes and tumor suppressor genes. Despite extensive research over the past decade, the molecular mechanisms that contribute to the pathogenesis of HCC are still largely unknown. Deletions of chromosome 1p are frequently detected in many human cancers including HCC, in particular, 1p36 deletion is found to be associated with the early stage of hepatocarcinogenesis. In this study, we have performed RNA sequencing of three paired HCC clinical samples and identified Aldo-Keto Reductase family 7A isoform 3 (AKR7A3) which is located on 1p36.13 as a putative tumor suppressor gene in HCC. Functional assays were performed to investigate its function in HCC cells. Downregulation of AKR7A3 was detected in 38.8% of HCC cases examined, where its downregulation was associated with high level of serum AFP (i.e.>400 ng/ml) (P<0.001), poor tumor differentiation(P=0.011) and overall survival time (P=0.031). AKR7A3 was significantly downregulated with lower level in patient group with loss of heterozygosity (LOH) compared to patient group without LOH (P<0.05). In addition, the down regulation of AKR7A3 was significantly correlated with promoter hypermethylation (P<0.01). Functional assays showed that ectopic expression of AKR7A3 inhibited anchorage-dependent and –independent growth, cell migration and invasion abilities in HCC cells. Furthermore, overexpression of AKR7A3 increased the chemosensitivity to cisplatin (CDDP) of HCC cells while the knockdown cells showed more resistant to CDDP treatment. Taken together, our results showed that AKR7A3 has a tumor suppressive role in the progression of HCC. Further characterization of AKR7A3 in hepatocarcinogenesis may help identify novel therapeutic target for HCC treatment and predict the chemotherapy response in HCC patients.