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Abstract Background Emerging evidences have indicated that long noncoding RNAs (lncRNAs) play essential roles in the development and progression of cancers. Dysregulation of lncRNA MIR31HG has recently been reported in several types of cancers, and researches on the function of MIR31HG in cancers suggested that MIR31HG could act as either oncogene or tumor suppressor. But the functional involvement of MIR31HG has not been studied in hepatocellular carcinoma (HCC). Methods In this study, MTS assays, colony formation assay, Wound-healing assay, Transwell assy, and tumor xenografts experiments were used to identify biological effects of MIR31HG on HCC cells HCC proliferation and metastasis in vitro and in vivo. Dual-luciferase reporter assay and RNA immunoprecipitation (RIP) assay were performed to show the interactions of MIR31HG and miR-575. The bioinformatics methods were completed to find the target genes of miR-575. And Dual-luciferase reporter assay and Western blot analysis were further used to confirm the target gene of miR-575. Results We found that overexpression of MIR31HG obviously suppressed HCC proliferation and metastasis in vitro and in vivo, whereas knockdown of MIR31HG had the opposite effects. Besides, overexpression of MIR31HG significantly decreased the expression of microRNA-575 (miR-575), which plays an oncogenic role in HCC. Moreover, dual-luciferase reporter assay and RNA immunoprecipitation (RIP) assay revealed that MIR31HG exerted tumor-suppressive functions by binding directly to miR-575, and there was a reciprocal inhibition between MIR31HG and miR-575 in the same RNA-induced silencing complex (RISC). Furthermore, overexpression of MIR31HG enhanced the expression of suppression of tumorigenicity 7 like (ST7L), which was identified as a downstream target gene of miR-575. Thus, MIR31HG positively regulated ST7L expression through sponging miR-575, and acted as tumor suppressor in HCC. Conclusions Overall, our study illuminates the role of MIR31HG as a miRNA sponge in HCC, and sheds new light on lncRNA-directed diagnostics and therapeutics in HCC.