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Background: ALX4 is a paired-like homedomain transcription factor mainly expressed in the mesenchymal compartment of variety of developing tissues, but its functions, regulation mechanisms and clinical values in breast cancer remains unclear. Methods: The expression of ALX4 in breast cancer cell lines and patients' tissues were detected by RT-PCR, qPCR and western blot. Furthermore TCGA database was applied to confirm these results. MSP and BSP methods were used to assess the methylation of ALX4 promoter region. In vitro proliferation, metastasis and in vivo nude mice model were used to evaluate the anti-tumor effect of ALX4 on breast cancer cell lines. Luciferase reporter assay, western blot and TCGA database were used to investigate the tumor suppression mechanisms of ALX4. TMA of 142 breast patients was generated to evaluate the clinical significance of ALX4. Results: Expression analysis revealed that ALX4 expression is down regulated in breast cancer cell lines and tissues. MSP study showed that the promoter region of ALX4 was hyper-methylated 100% (3/3) in breast cancer cell lines and 69.44% (75/108) in primary breast tumors tissues while 0% (0/8) in normal breast tissues. 5-aza-dc demethylation treatment restored ALX4 expression in breast cancer cell lines. Functional studies showed that ectopic expression of ALX4 in breast cancer cells inhibited cell proliferation, metastasis in vitro and in vivo. Mechanism study found that ALX4 exerted its anti-tumor function by suppressing the Wnt/β-catenin pathway through promoting the phosphorylation degradation of β-catenin in a GSK3β dependent manner. Clinically multivariate analysis showed that ALX4 expression was an independent favorable prognostic factor in breast cancer patients. Conclusions: We reveal for the first time that ALX4 acts as a novel functional tumor suppressor inactivated by DNA methylation and is an independent prognostic factor in breast cancer. [ABSTRACT FROM AUTHOR]