Background: A large number of advanced gastric cancer patients undergoing curative gastrectomy with D2 lymph node dissection (D2 gastrectomy) show peritoneal metastasis. The source of these metastatic cells and their treatment remain unclear. We examined the mechanism of surgery-induced peritoneal metastasis and determined the appropriate intraoperative treatment. Methods: (1) Curative gastrectomy was performed for 102 gastric cancer patients. Peritoneal lavage fluid was collected before and after gastrectomy. Cytology, RT-PCR, and cell culture were used to determine the presence of cancer cells. Proliferative potential of tumor cells was evaluated using Ki-67 staining. Tumorigenic capacity was assessed by cell injection into the peritoneal cavity of NOD/ShiJic-scid mice. (2) Fifty clinical T3(SE) or T4(SI) advanced gastric cancer patients undergoing curative D2 gastrectomy prospectively received intraoperative hyperthermic intraperitoneal chemotherapy (HIPEC) in a phase II trial. HIPEC comprised 50 mg CDDP, 10 mg MMC, and 1000 mg 5-FU in 5 L saline maintained at 42–43C° for 30 min. Results: (1) Of 102 peritoneal lavage fluid samples obtained before gastrectomy, 57 from both early and advanced cancer patients did not contain CEA or CK20 mRNA amplification products or cancer cells. Of these 57 samples, CEA or CK20 mRNA was detected in 35 and viable cancer cells were identified in 24 after gastrectomy. Viable cancer cells in all 24 cases showed Ki-67 positivity, indicating proliferative activity. Cultured viable cancer cells developed into peritoneal tumor nodules after spill over into the peritoneal cavity in NOD/ShiJic-scid mice. (2) Fifty patients were eligible for the phase II clinical trial. The overall 5-year survival rate for all patients was 92.4%. This rate in patients with pT2(ss) (n = 12), pT3(se) (n = 35), and pT4(si) (n = 3) disease was 90.0%, 92.3%, and 100%, respectively. Only 2 patients (4%) showed peritoneal relapse. Conclusions: Viable tumorigenic cancer cells spilled over the peritoneal cavity during curative gastrectomy. Intraoperative HIPEC following curative D2 gastrectomy effectively prevented peritoneal metastasis, thereby potentially improving the prognosis of patients with advanced gastric cancer.