We currently have limited knowledge of the involvement of long non-coding RNAs (lncRNAs) in normal cellular processes and pathologies. Here, we identify and characterize SNHG5 as a stable cytoplasmic lncRNA with up-regulated expression in colorectal cancer. Depletion of SNHG5 induces cell cycle arrest and apoptosis in vitro and limits tumour outgrowth in vivo, whereas SNHG5 overexpression counteracts oxaliplatin-induced apoptosis. Using an unbiased approach, we identify 121 transcript sites interacting with SNHG5 in the cytoplasm. Importantly, knockdown of key SNHG5 target transcripts, including SPATS2, induces apoptosis and thus mimics the effect seen following SNHG5 depletion. Mechanistically, we suggest that SNHG5 stabilizes the target transcripts by blocking their degradation by STAU1. Accordingly, depletion of STAU1 rescues the apoptosis induced after SNHG5 knockdown. Hence, we characterize SNHG5 as a lncRNA promoting tumour cell survival in colorectal cancer and delineate a novel mechanism in which a cytoplasmic lncRNA functions through blocking the action of STAU1.