We identified gamma-glutamyltransferase 7 (GGT7) to be frequently downregulated in gastric cancer, but its role remains unknown. Here we elucidated the clinical significance, functional roles, and molecular mechanism of GGT7 in gastric cancer. GGT7 was downregulated by promoter methylation and restored by demethylation treatment in gastric cancer cells. GGT7 methylation inversely correlated with mRNA expression in gastric tumors (n = 221; r = -0.686, P < 0.0001). High-expression of GGT7 in adjacent non-tumor tissues was significantly associated with favorable survival in gastric cancer patients (n = 138; P = 0.009), and was an independent prognostic factor by multivariate Cox regression (HR = 0.381, P < 0.05). GGT7 significantly inhibited gastric cancer cell growth, G1-S transition, and migration and invasion abilities. GGT7 also significantly attenuated the growth of subcutaneous xenograft tumors and reduced metastasis to the lung in nude mice. The mitophagy regulator RAB7 was identified as a direct downstream co-player of GGT7 by co-immunoprecipitation followed by mass spectrometry. Growth suppression effect of GGT7 was at least partly dependent on RAB7 by rescue experiments. GGT7 induced autophagy as shown by electron microscopy and confirmed by the increased LC3B and decreased p62. GGT7 recruited RAB7 by direct binding and drove RAB7 to translocate from nucleus to cytoplasm, subsequently mediating mitophagy by increasing mitophagy mediators/inducers. GGT7 inhibited intracellular ROS, which was associated with increased mitophagy, and subsequently suppressed MAPK signaling. Collectively, GGT7 plays a pivotal tumor-suppressing role in gastric cancer by directly binding with RAB7 to induce mitophagy and inhibit ROS and MAPK cascades. GGT7 is an independent prognostic factor for gastric cancer patients.