Long non-coding RNAs (lncRNAs) play important roles in a variety of tumours; however, their biological function and clinical significance in hepatocellular carcinoma (HCC) are still unclear. In the present study, the clinical significance, biological function and regulatory mechanisms of lncRNA DCST1-AS1 in HCC were investigated. Differential lncRNAs in HCC were identified based on The Cancer Genome Atlas (TCGA) database. The biological function and mechanism of DCST1-AS1 were studied in vitro and in vivo. LncRNA DCST1-AS1 was highly expressed in HCC tissues, and the high expression of DCST1-AS1 was significantly correlated with larger tumours and shorter survival time. Moreover, DCST1-AS1 knockout significantly inhibited proliferation, promoted apoptosis and cycle arrest of HCC cells, and inhibited tumour growth in vivo. According to functional analysis, DCST1-AS1 competitively bound miR-1254, thus blocking the silencing effect of miR-1254 on the target gene Fas apoptosis inhibitor 2 (FAIM2). A novel lncRNA DCST1-AS1 that functions as an oncogene in HCC was discovered. DCST1-AS1 up-regulates the expression of FAIM2 by up-regulating the expression of miR-1254, ultimately promoting the proliferation of HCC cells. This research provides new therapeutic targets for HCC.