In this study, we assessed the prognostic value of the lymph node ratio (LNR), established a hypothetical tumor–ratio–metastasis (TRM) staging system and compared it with the 7th edition International Union Against Cancer pathological N (pN) and tumor–node–metastasis (TNM) system. A total of 1343 gastric cancer patients undergoing D2 resection were staged using the TRM staging system and the 7th edition TNM system. Optimal cut points of LNR were calculated using X-tile software and validated by bootstrapping. Homogeneity, discriminatory ability, and monotonicity of gradients of the TRM and TNM systems were compared using linear trend χ2, likelihood ratio χ2 statistics, and Akaike information criterion (AIC) calculations. Optimal cut points classified patients into LNR0 (0%), LNR1 (1%–30%), LNR2 (31%–60%), and LNR3 (61%–100%) groups. In univariate, multivariate and stratified analyses, the LNR staging showed superiority to the 7th edition pN staging. The TRM staging system had higher linear trend and likelihood ratio χ2 scores and smaller AIC values compared with those for the TNM system, which represented the optimum prognostic stratification. The novel TRM staging system predicts survival of gastric cancer more accurately than the 7th edition TNM system. It may be considered as an alternative to TNM system.