Background: The significance of conversion therapy (CT), whereby patients (pts) with unresectable disease respond to chemotherapy and subsequently receive surgery with curative intent (adjuvant surgery: AS), has been specifically established for metastatic colorectal cancer. However, such a strategy for advanced or recurrent gastric cancer (AGC) remains controversial. This study aims to clarify the clinical significance of CT for AGC. Methods: In this retrospective multi-institution observational study, we analyzed 168 AGC pts who received chemotherapy consisting of docetaxel, cisplatin or oxaliplatin, and S-1 ± trastuzumab between 2003 and 2019. We divided pts into two groups: those who underwent CT (group CT) or chemotherapy only (group C). Propensity score analysis with 1:1 matching minimized confounding bias when comparing efficacy and safety between groups. Results: A tumor response to chemotherapy was observed in 82.4% of all cases, while 34.5% (58/168) underwent AS. Fifty-one of the 58 pts underwent an R0 resection, and 79.3% were deemed histological responders. After matching, 44 pairs of C and CT pts were selected; significant differences in baseline characteristics were not observed. Incidences of adverse events during chemotherapy were similar between groups, with neutropenia and febrile neutropenia as common grade 3–4 events. Compared with group C, group CT had a significantly better median overall survival (OS) (15.5 vs. 46.0 months; hazard ratio [HR] 0.32; 95% confidence interval [CI] 0.18–0.58; p < .001), and a prolonged progression-free survival (6.5 vs.22.6 months; HR 0.33; 95% CI 0.19–0.56; p < .001). Subgroup analysis of OS showed a favorable trend for CT for almost all parameters. In a multivariate analysis, ECOG performance status (HR 0.10; 95% CI 0.03–0.31) and AS (HR 0.20; 95% CI 0.10–0.40) correlated with favorable OS. In the CT group, pathological response was an independent prognostic factor (HR 0.16; 95% CI 0.06–0.39). Conclusions: CT was associated with better outcomes in AGC pts, even after baseline adjustment. Our data warrants further large-scale studies to establish a conversion therapeutic strategy.