Abstract Background The mechanism of recurrence and metastasis of hepatocellular carcinoma (HCC) is complex and challenging. Methyl-CpG binding domain protein 3 (MBD3) is a key epigenetic regulator involved in the progression and metastasis of several cancers, but its role in HCC remains unknown. Methods MBD3 expression in HCC was detected by immunohistochemistry and its association with clinicopathological features and patient’s survival was analysed. The effects of MBD3 on hepatoma cells growth and metastasis were investigated, and the mechanism was explored. Results MBD3 is significantly highly expressed in HCC, associated with the advanced tumour stage and poor prognosis in HCC patients. MBD3 promotes the growth, angiogenesis and metastasis of HCC cells by inhibiting the tumour suppressor tissue factor pathway inhibitor 2 (TFPI2). Mechanistically, MBD3 can inhibit the TFPI2 transcription via the Nucleosome Remodeling and Deacetylase (NuRD) complex-mediated deacetylation, thus reactivating the activity of matrix metalloproteinases (MMPs) and PI3K/AKT signaling pathway, leading to the progression and metastasis of HCC Conclusions Our results unravel the novel regulatory function of MBD3 in the progression and metastasis of HCC and identify MBD3 as an independent unfavourable prognostic factor for HCC patients, suggesting its potential as a promising therapeutic target as well.