Abstract Background Long non-coding RNAs (lncRNAs) have been reported to play a key role in gastric cancer (GC) tumorigenesis. However, the clinical application value of serum lncRNAs in GC has remained largely unknown. We investigated the role of a novel lncRNA named CTC-497E21.4 in the diagnosis and the prognosis of GC. Methods We focused on evaluation of lncRNA CTC-497E21.4 by real-time fluorescent quantitative polymerase chain reaction (RTFQ-PCR). The study involved following aspects: (1) confirmation of the higher lncRNA CTC-497E21.4 expression in different types of GC specimens than corresponding controls; (2) evaluation of monitoring tumor dynamics by the serum lncRNA CTC-497E21.4 assay; (3) evaluation of the prognostic value of lncRNA CTC-497E21.4 assay in GC. Results (1) The method of RTFQ-PCR detection of lncRNA CTC-497E21.4 was evaluated to have high sensitivity and specificity. (2) The expression levels of lncRNA CTC-497E21.4 were higher in GC patients compared with corresponding controls (p<0.001), and the combination of serum lncRNA CTC-497E21.4, CEA and CA19-9 could improve diagnostic sensitivity (96.36%). (3) The serum lncRNA CTC-497E21.4 expression levels were lower in postoperative samples than preoperative samples (p=0.0021) and survival curves downloaded from TCGA showed high lncRNA CTC-497E21.4 levels were associated with poor OS of GC (p=0.0351). Conclusions lncRNA CTC-497E21.4 may be a potential biomarker for the diagnosis and the prognosis of GC.