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Background Circular RNAs (circRNAs) have been shown to play a crucial role in tumorigenesis. In this study, we investigated the function of hsa_circ_0137008 and its underlying molecular mechanism in colorectal cancer (CRC). Methods Gene expression was conducted by quantitative real-time PCR or western blot. Functional experiments were performed by cell count kit-8, colony formation assay, wound healing, and transwell assays. Luciferase reporter assay and RNA pull-down assay were performed to investigate the molecular mechanism of hsa_circ_0137008 in CRC. In addition, the xenograft tumor model was applied to determine the role of hsa_circ_0137008 in vivo. Results Downregulation of hsa_circ_0137008 was observed in CRC tissues and cell lines. Functionally, overexpression of hsa_circ_0137008 inhibited the proliferation of CRC cells, as indicated by the inhibition of proliferative protein expression (Ki67 and PCNA), reduced cell viability and colony formation ability. Upregulation of hsa_circ_0137008 suppressed the migration, invasion, and epithelial to mesenchymal transition (EMT) of CRC cells. Mechanically, hsa_circ_0137008 negatively regulated the expression of microRNA-338-5p (miR-338-5p). Furthermore, hsa_circ_0137008 abated the miR-338-5p mediated promotion on CRC cell progression. Tumor suppressive function of hsa_circ_0137008 was validated in vivo. Conclusion These findings highlighted the fact that overexpression of hsa_circ_0137008 inhibited the progression of CRC via sponging miR-338-5p, suggesting that hsa_circ_0137008/miR-338-5p axis is a principal regulator of CRC tumorigenesis.