Recent studies have identified many long non-coding RNAs (lncRNAs) with critical roles in various biological processes including tumorigenesis. Taurine-upregulated gene 1 (TUG1), is an lncRNA recently reported to be involved in the progression of several human cancers. This study aimed to investigate the clinical significance and biological functions of TUG1 in breast cancer. Quantitative real-time polymerase chain reaction (qRT-PCR) was performed to measure TUG1 expression in cells from breast cancer cell lines and in 58 matched pairs of breast cancer and normal tissue samples from patients with clinicopathological comparisons. Gain-and loss-of-function experiments were performed in vitro to investigate the biological role of TUG1. TUG1 expression was significantly downregulated in both breast cancer tissues and cell lines compared to controls, and low TUG1 expression was significantly correlated with mutant p53 expression (p=0.037) and lymph node metastasis (p=0.044). In vitro experiments revealed that TUG1 overexpression significantly suppressed cell proliferation by causing cell cycle arrest and inducing apoptosis in breast cancer cells, while TUG1 knockdown caused increased cell growth via promoting cell cycle progression and regulating the expression of cyclinD1 and CDK4. Further functional assays indicated that TUG1 overexpression significantly promoted cell migration and invasion while TUG1 knockdown had the opposite effects. Our findings indicate that the lncRNA TUG1 is a tumor suppressor in breast cancer, and may serve as a novel prognostic biomarker and potential therapeutic target for patients with breast cancer.