CD44E is a frequently overexpressed variant of CD44 in gastric cancer. Mechanisms that regulate CD44 splicing and expression in gastric cancer remain unknown. Herein, we investigated the role of DARPP-32 (dopamine and cyclic adenosine monophosphate-regulated phosphoprotein, Mr 32000) in promoting tumor growth through regulation of CD44 splicing. Using western blot and quantitative real-time PCR analysis, our results indicated that knockdown of endogenous DARPP-32 markedly reduces the expression of CD44 V8-V10 (CD44E). Using a quantitative splicing luciferase reporter system, we detected a significant increase in the reporter activity following DARPP-32 overexpression (P<0.001). Conversely, knocking down endogenous DARPP-32 significantly attenuated the splicing activity (P<0.001). Further experiments showed that DARPP-32 regulates the expression of SRp20 splicing factor and co-exists with it in the same protein complex. Inhibition of alternative splicing with digitoxin followed by immunoprecipitation and immunoblotting indicated that DARPP-32 has an important role in regulating SRp20 protein stability. The knockdown of endogenous DARPP-32 confirmed that DARPP-32 regulates the SRp20-dependent CD44E splicing. Using tumor xenograft mouse model, knocking down endogenous DARPP-32 markedly reduced SRp20 and CD44E protein levels with a decreased tumor growth. The reconstitution of SRp20 expression in these cells rescued tumor growth. In addition, we also demonstrated frequent co-overexpression and positive correlation of DARPP-32, SRp20 and CD44E expression levels in human gastric primary tumors. Our novel findings establish for the first time the role of DARPP-32 in regulating splicing factors in gastric cancer cells. The DARPP-32-SRp20 axis has a key role in regulating the CD44E splice variant that promotes gastric tumorigenesis.