The Wnt pathway is a key regulator of embryonic development and stem cells, and its aberrant activation is associated with human malignancies, most notably hepatocellular carcinoma (HCC). Epigenetic deregulation of the genes encoding the secreted frizzled-related proteins (sFRPs), the Wnt signalling antagonists, has been linked with aberrant hyperactivation of the Wnt signalling in HCC cells; however, the precise underlying mechanism remains elusive. We investigated the methylation profiles of Wnt antagonists in liver samples of different stages of HCC development and liver cancer cell lines and studied the functional impact of aberrant epigenetic silencing of sFRPs on the canonical Wnt pathway and cell viability. We found that the sFRP1 gene encoding the subunit is a frequent target of aberrant DNA hypermethylation and silencing in HCC tumours, whereas other extracellular Wnt antagonists, WIF1 and Dkk3, exhibited no methylation in tumour cells, consistent with the notion that aberrant methylation events in cancer cells are non-randomly distributed among the genes and that there is a strong preference for hypermethylation of specific genes in HCC. In addition, by comparing sFRP1 methylation status in HCC tumours with normal, cirrhotic and chronic hepatitis liver tissues, we identified sFRP1 gene as a potential early marker of HCC. The restoration of sFRP1 expression in cancer cells by ectopic expression inhibited Wnt activity accompanied with destabilization of β-catenin and downregulation of c-Myc and cyclin D1, the known downstream targets of Wnt pathway. Importantly, restoring sFRP1 levels in cancer cells inhibited cell growth and induced apoptotic cell death. This study supports the critical role for sFRP1 silencing in hepatocellular carcinoma and reinforces the importance of the Wnt antagonists in preventing oncogenic stabilization of β-catenin and chronic activation of the canonical Wnt pathway, suggesting that sFRP1 may be an attractive target for early cancer detection and therapeutic intervention.