Long noncoding RNAs have been identified as key regulators in the progression of various cancers. LINC00261 has been reported as a tumor suppressor in multiple cancers. However, its function and underlying mechanisms in pancreatic cancer remain largely unclear. Quantitative real-time PCR was performed to detect RNA expression. In situ hybridization was used to discover the subcellular location. The direct binding of LINC00261 to miR-222-3p was verified using a dual-luciferase reporter assay and RNA immunoprecipitation. LINC00261-binding proteins were detected using an RNA pulldown assay. LINC00261 was downregulated in pancreatic cancer tissues and cell lines. Its reduced expression was correlated with advanced pathological stage and poor prognosis. Forced expression of LINC00261 suppressed pancreatic cancer glycolysis and proliferation and induced cell cycle arrest and apoptosis. Mechanistically, downregulation of LINC00261 was caused by hypermethylation of the CpG island in the promoter region and EZH2-mediated histone H3 lysine 27 trimethylation. Moreover, LINC00261 exerted its biological function by binding to miR-222-3p to activate the HIPK2/ERK/c-myc pathway. In addition, LINC00261 could also reduce c-myc expression by sequestering IGF2BP1. Our study suggests that LINC00261 functions as a tumor suppressor in pancreatic cancer and identifies novel epigenetic and posttranscriptional regulatory mechanisms of LINC00261, which contribute to the targeted therapy of pancreatic cancer.