The aims of the present study are to investigate sub-cellular location, differential expression in different cancer stages and functional role of FAM134B in colon cancer development. FAM134B expression was studied and quantified at protein and mRNA levels in cell lines using immunocytochemistry, Western blot and real-time PCR. In vitro functional assays and an in vivo xenotransplantation mouse models were used to investigate the molecular role of FAM134B in cancer cell biology in response to FAM134B silencing with shRNA lentiviral particles. FAM134B protein was noted in both cytoplasm and nuclei of cancer cells. In cancer cells derived from stage IV colon cancer, FAM134B expression was remarkably reduced when compared to non-cancer colon cells and cancer cells derived from stage II colon cancer. FAM134B knockdown significantly (P < 0.05) increased the proliferation of colon cancer cells following lentiviral transfection. Furthermore, FAM134B suppression significantly increased (34–52%; P < 0.05) the clonogenic capacity, wound healing potential of and increases the proportion of cells performing DNA synthesis (P < 0.01). Xenotransplantation model showed that larger and higher-grade tumors were formed in mice receiving FAM134B knockdown cells. To conclude, expression analysis, in vitro and in vivo indicated that FAM134B acts as a cancer suppressor gene in colon cancer.