BACKGROUND: Long non-coding RNAs (lncRNAs) play vital roles in the development and progression of non-small-cell lung cancer (NSCLC); however, the role of most lncRNAs in NSCLC remains unknown. This study explored the clinical significance, biological function and underlying mechanism of lnc-GAN1 in NSCLC. METHODS: With a custom lncRNA microarray we found that lnc-GAN1 is markedly downregulated in NSCLC tissues. Then lnc-GAN1 expression level was measured using qRT-PCR in NSCLC tissues and cell lines. Survival was assessed using the Kaplan-Meier method. The biological functions of lnc-GAN1 in lung cancer cells were evaluated in vitro and in vivo. RNA fluorescence in situ hybridization and subcellular localization assays revealed the subcellular distribution of lnc-GAN1 in cells. Bioinformatic analysis was adopted to predict miRNAs and signaling pathways regulated by lnc-GAN1. RNA immunoprecipitation and Dual-luciferase reporter assays were used to assess the interaction between lnc-GAN1 and miR-26a-5p in lung cancer cells. RESULTS: lnc-GAN1 is downregulated in HCC tissues and associated with larger tumor size and poor overall survival and disease-free survival; its ectopic expression suppresses cell proliferation, colony formation, and cell cycle progression and induces apoptosis in NSCLC cells; it also inhibits tumor growth in the NSCLC xenograft model. We further proved that lnc-GAN1 is localized in cytoplasm and transcribed independently from its parental gene GAN. Mechanistically, lnc-GAN1 acts as a sponge for miR-26a-5p by two seed sequences, and the two non-coding RNAs have a negative relationship in NSCLC tissues; we further prove that PTEN is a direct target of miR-26a-5p and lnc-GAN1 inhibits cell cycle signaling pathway by activating PTEN, whose expression level correlated negatively with miR-26a-5p level but positively with lnc-GAN1 level in NSCLC samples. CONCLUSIONS: Lnc-GAN1 is downregulated and associated with poor survival of NSCLC patients, and mechanistically acts as a tumor suppressor via sponging and inhibiting miR-26a-5p to upregulate PTEN. This study provides a potential prognostic biomarker and treatment target for NSCLC.