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The aberrant expression of microRNAs (miRNAs) has emerged as an important hallmark of cancer. However, the molecular mechanisms underlying the changes in miRNA expression remain unclear. In this study, we discovered a novel epigenetic mechanism of miR-506 regulation and investigated its functional significance in pancreatic cancer. Sequencing analysis revealed that the miR-506 promoter is highly methylated in pancreatic cancer tissues compared with non-cancerous tissues. Reduced miR-506 expression was significantly associated with clinical stage, pathologic tumor status, distant metastasis and decreased survival of pancreatic cancer patients. miR-506 inhibited cell proliferation, induced cell cycle arrest at the G1/S transition and enhanced apoptosis and chemosensitivity of pancreatic cancer cells. Furthermore, we identified sphingosine kinase 1 (SPHK1) as a novel target of miR-506, the expression of which inhibited the SPHK1/Akt/NF-κB signaling pathway, which is activated in pancreatic cancer. High SPHK1 expression was significantly associated with poor survival in a large cohort of pancreatic cancer specimens. Our data suggest that miR-506 acts as a tumor suppressor miRNA and is epigenetically silenced in pancreatic cancer. The newly identified miR-506/SPHK1 axis represents a novel therapeutic strategy for future pancreatic cancer treatment.