Assessment of biological diagnostic factors providing clinically-relevant information to guide physician decision-making are still needed for diseases with poor outcomes, such as non-small cell lung cancer (NSCLC). Epidermal growth factor receptor (EGFR) is a promising molecule in the clinical management of NSCLC. While the EGFR transmembrane form has been extensively investigated in large clinical trials, the soluble, circulating EGFR isoform (sEGFR), which may have a potential clinical use, has rarely been considered. This study investigates the use of sEGFR as a potential diagnostic biomarker for NSCLC and also characterizes the biological function of sEGFR to clarify the molecular mechanisms involved in the course of action of this protein. Plasma sEGFR levels from a heterogeneous cohort of 37 non-advanced NSCLC patients and 54 healthy subjects were analyzed by using an enzyme-linked immunosorbent assay. The biological function of sEGFR was analyzed in vitro using NSCLC cell lines, investigating effects on cell proliferation and migration. We found that plasma sEGFR was significantly decreased in the NSCLC patient group as compared to the control group (median value: 48.6 vs. 55.6 ng/mL respectively; p = 0.0002). Moreover, we demonstrated that sEGFR inhibits growth and migration of NSCLC cells in vitro through molecular mechanisms that included perturbation of EGF/EGFR cell signaling and holoreceptor internalization. These data show that sEGFR is a potential circulating biomarker with a physiological protective role, providing a first approach to the functional role of the soluble isoform of EGFR. However, the impact of these data on daily clinical practice needs to be further investigated in larger prospective studies.