Olfactomedin 4 (OLFM4) has been demonstrated to be upregulated in various cancers and involved in many cellular processes such as cell adhesion, apoptosis, and cell proliferation. In gastric cancer, clinicopathological relevance of OLFM4 expression has been reported. However, there are few studies showing how expression of OLFM4 evolves during multistep gastric carcinogenesis. In this study, we investigated OLFM4 expression during gastric carcinogenesis using RNA in situ hybridization (ISH). We found that OLFM4 expression is absent in normal gastric mucosa, begins to appear at the isthmus region in gastric glands in chronic gastritis, and is remarkably increased in intestinal metaplasia (IM). Interestingly, gastric-type glands around IM frequently expressed OLFM4 before CDX2 was expressed, suggesting that OLFM4 might be involved in regulating CDX2 expression. However, overexpression of OLFM4 failed to induce CDX2 transcription. All gastric adenomas were strongly positive for OLFM4. OLFM4 expression was higher in intestinal type, well to moderately differentiated and early-stage adenocarcinomas, and decreased in poorly differentiated and advanced-stage gastric cancer (GC). Although OLFM4 expression had no prognostic value for GC overall (P = 0.441), it was associated with poor survival of GC in stage II, III, and IV (P = 0.018), suggesting that OLFM4 expression has prognostic significance for late-stage GC. Our findings suggest that OLFM4 is not only involved in early stages of gastric carcinogenesis but also a useful prognostic marker for advanced GC, which is encouraging for further studies exploring OLFM4 as a potential target for therapy of GC.