Abstract Background Hepatocellular carcinoma (HCC) is the major histological type of liver cancer with high morbidity and mortality worldwide. Long noncoding RNAs (lncRNA) has been proved to be associated with various cancer types, while its regulation in HCC is largely unknown. Methods To figure out the specific role of lncRNA EPB41L4A-AS2 in HCC. Fluorescence in situ hybridization (FISH) was first used to determine the cellular sublocalization of EPB41L4A-AS2 to determine its primary mode of action. QRT-PCR, Western blot and hematoxylin-eosin staining were then used to measure the expression of genes in cells and tissues. Cell proliferation and invasion assays were performed to determine the effects of EPB41L4A-AS2, miR-301a-5p and FOXL1 on the malignant phenotype of tumor cells. With luciferase reporter assay, the direct interaction between target genes were further confirmed for research on molecular mechanism. Finally, the mice hepatocarcinoma model was also established to disclose the tumor suppressor effects of EPB41L4A-AS2 in vivo. Results Here, we have identified a novel lncRNA EPB41L4A-AS2, which is significantly downregulated both in HCC cells and tissues, and plays a negative regulatory role in HCC proliferation and invasion. Mechanistically, cytoplasmic lncRNA EPB41L4A-AS2 functions as an efficient miR-301a-5p sponge, thereby release the expression inhibition of forkhead box L1 (FOXL1). Indeed, lncRNA EPB41L4A-AS2 inhibits proliferation and migration by upregulating FOXL1 expression and FOXL1 was confirmed as a direct target of miR-301a-5p. MiR-301a-5p shows an inverse correlation with EPB41L4A-AS2 expression and was verified as a direct target of EPB41L4A-AS2 as well. Correspondingly, FOXL1 and miR-301a-5p show opposite biological effects in cell proliferation and migration. Moreover, miR-301a-5p overexpression rescued the EPB41L4A-AS2 upregulation induced depression in proliferation, migration and invasion of HCC cells, as well as promotion effect on FOXL1 expression. Also, in vivo experiments proved that EPB41L4A-AS2 suppress tumor growth and extrahepatic metastasis (lung) via the miR-301a-5p-FOXL1 axis. Conclusions Taken together, this research revealed a concrete mechanism of lncRNA EPB41L4A-AS2 in HCC, which may serve as a potential biomarkers and novel therapeutic targets for further clinical application.