Gastrokine 2 (GKN2) is an anti-inflammatory protein produced by the gastric epithelium. GKN2 expression is progressively lost during gastric cancer (GC), which is believed to play a casual role in GC development. Here, we use bacterial artificial chromosome transgenic studies to identify a glucocorticoid-responsive enhancer element that likely governs expression of GKN1/GKN2, which, via parallel expression loss of the anti-inflammatory glucocorticoid receptor, reveals a novel mechanism to explain the loss of GKN2 during GC pathogenesis.