Colorectal cancer (CRC) is one of the common malignant tumors worldwide. Both genetic and epigenetic changes are regarded as important factors of colorectal carcinogenesis. Loss of DACH1 expression was found in breast, prostate, and endometrial cancer. To analyze the regulation and function of DACH1 in CRC, 5 colorectal cancer cell lines, 8 cases of normal mucosa, 15 cases of polyps and 100 cases of primary CRC were employed in this study. In CRC cell lines, loss of DACH1 expression was correlated with promoter region hypermethylation, and re-expression of DACH1 was induced by 5-Aza-2 '-deoxyazacytidine treatment. We found that DACH1 was frequently methylated in primary CRC and this methylation was associated with reduction in DACH1 expression. These results suggest that DACH1 expression is regulated by promoter region hypermethylation in CRC. DACH1 methylation was associated with late tumor stage, poor differentiation, and lymph node metastasis. Re-expression of DACH1 reduced TCF/LEF luciferase reporter activity and inhibited the expression of Wnt signaling downstream targets (c-Myc and cyclinD1). In xenografts of HCT116 cells in which DACH1 was re-expressed, tumor size was smaller than in controls. In addition, restoration of DACH1 expression induced G2/M phase arrest and sensitized HCT116 cells to docetaxel. DACH1 suppresses CRC growth by inhibiting Wnt signaling both in vitro and in vivo. Silencing of DACH1 expression caused resistance of CRC cells to docetaxel. In conclusion, DACH1 is frequently methylated in human CRC and methylation of DACH1 may serve as detective and prognostic marker in CRC.