Circular RNAs (circRNAs) are a class of non-coding RNAs broadly expressed in cells of various species. Their role in cancers, especially in gastric cancer, is poorly understood. Circular RNA 0000096 (hsa_circ_0000096) levels in 101 paired gastric cancer tissues and adjacent non-tumorous tissues from patients with gastric cancer were detected by real-time quantitative reverse transcription-polymerase chain reaction. A receiver operating characteristic curve was generated to evaluate the diagnostic value of hsa_circ_0000096. RNA interference was used to manipulate the expression of hsa_circ_0000096. Its biological effects were evaluated by flow cytometry, real-time cell analysis, a wound scratch assay, western blot analysis and xenograft models. Hsa_circ_0000096 was found to be significantly downregulated in gastric cancer tissues and gastric cancer cell lines compared with paired adjacent non-tumorous tissues and normal gastric epithelial cells (P<0.001). Moreover, knockdown of hsa_circ_0000096 significantly inhibited cell proliferation and migration in vitro and in vivo. The results of both immunohistochemical and western blot analyses showed that the protein levels of cyclin D1, cyclin-dependent kinase 6 (CDK6), matrix metalloproteinase-2 and MMP-9 were significantly reduced in vitro and in vivo. A gastric cancer xenograft nude mouse model indicated that Ki67 and VEGF were reduced in a dose-dependent manner following knockdown of hsa_circ_0000096. However, the expression of E-cadherin increased. Hsa_circ_0000096 may be used as a potential novel biomarker for gastric cancer. It affects gastric cancer cell growth and migration by regulating cyclin D1, CDK6, MMP-2 and MMP-9.