Long non-coding RNA Hotair has been considered as a pro-oncogene in multiple cancers. Although there is emerging evidence that reveals its biological function and the association with clinical prognosis, the precise mechanism remains largely elusive. We investigated the function and mechanism of Hotair in hepatocellular carcinoma (HCC) cell models and a xenograft mouse model. The regulatory network between miR-218 and Hotair was elucidated by RNA immunoprecipitation and luciferase reporter assays. Finally, the correlation between Hotair, miR-218 and the target gene Bmi-1 were evaluated in 52 paired HCC specimens. In this study, we reported that Hotair negatively regulated miR-218 expression in HCC, which might be mediated through an EZH2-targeting-miR-218-2 promoter regulatory axis. Further investigation revealed that Hotair knockdown dramatically inhibited cell viability and induced G1-phase arrest in vitro and suppressed tumorigenicity in vivo by promoting miR-218 expression. Oncogene Bmi-1 was shown to be a functional target of miR-218, and the main downstream targets signaling, P16(Ink4a) and P14(ARF), were activated in Hotair-suppressed tumorigenesis. In primary human HCC specimens, Hotair and Bmi-1 were concordantly upregulated whereas miR-218 was downregulated in these tissues. Furthermore, Hotair was inversely associated with miR-218 expression and positively correlated with Bmi-1 expression in these clinical tissues. Hotair silence activates P16(Ink4a) and P14(ARF) signaling by enhancing miR-218 expression and suppressing Bmi-1 expression, resulting in the suppression of tumorigenesis in HCC. Copyright © 2015 European Association for the Study of the Liver. Published by Elsevier B.V. All rights reserved.