Hepatocellular carcinoma (HCC) is one of the most death-related cancers worldwide. Identifying cancer-associated genes and uncovering the vital molecular mechanisms of HCC progression contribute greatly to the prognosis and novel therapeutic strategies for HCC patients. Although lncRNAs have been proved to be critical modulators of various cellular processes, the functions of lncRNAs in HCC progression are just emerging. Here, we found that a long non-coding RNA (lncRNA) named LINC02362, whose biological effects have yet been unveiled in cancers, was associated with a better prognosis in patients with HCC. Gain-of-function analyses showed that LINC02362 inhibited the survival, migration, invasion and epithelial-to-mesenchymal transition (EMT) of HCC cells. Moreover, miR-516b-5p was enriched as a target of LINC02362, which functioned as a sponge to regulate the endogenous levels of miR-516b-5p. Furthermore, we confirmed that SOSC2 served as a downstream target gene which was negatively controlled by miR-516b-5p. Importantly, a series of rescue experiments indicated that the tumor-suppressive effects of LINC02362 were achieved through the modulation of the miR-516b-5p/SOSC2 axis. In summary, we identified LINC02362 as a candidate tumor-inhibitory lncRNA that might serve as a biomarker for the prognosis of HCC and a promising therapeutic agent for patients with HCC.