Heparanase is highly implicated in tumor metastasis due to its capacity to cleave heparan sulfate and, consequently, remodel the extracellular matrix underlying epithelial and endothelial cells. In striking contrast, only little attention was given to its close homolog, heparanase 2 (Hpa2), possibly because it lacks heparan sulfate-degrading activity typical of heparanase. We subjected sections of gastric carcinoma to immunostaining and correlated Hpa2 immunoreactivity with clinical records, including tumor grade, stage and patients' status. We over-expressed Hpa2 in gastric carcinoma cell lines and examined their tumorigenic properties in vitro and in vivo. We also evaluated the expression of Hpa2 by gastric carcinoma cells following inhibition of the proteasome, leading to proteotoxic stress, and the resulting signaling responsible for Hpa2 gene regulation. Here, we report that gastric cancer patients exhibiting high levels of Hpa2 survive longer. Similarly, mice administrated with gastric carcinoma cells engineered to over-express Hpa2 produced smaller tumors and survived longer than mice administrated with control cells. This was associated with increased phosphorylation of AMP-activated protein kinase (AMPK), a kinase that is situated at the center of a tumor suppressor network. We also found that MG132, an inhibitor of the proteasome that results in proteotoxic stress, prominently enhances Hpa2 expression. Notably, Hpa2 induction by MG132 appeared to be mediated by AMPK, and AMPK was found to induce the expression of Hpa2, thus establishing a loop that feeds itself where Hpa2 enhances AMPK phosphorylation that, in turn, induces Hpa2 expression, leading to attenuation of gastric tumorigenesis. These results indicate that high levels of Hpa2 in some tumors are due to stress conditions that tumors often experience due to their high rates of cell proliferation and high metabolic demands. This increase in Hpa2 levels by the stressed tumors appears critically important for patient outcomes.