Background: Bladder cancer (BLCA) is a malignancy that frequently metastasizes and leads to poor patient prognosis. It is essential to understand the molecular mechanisms underlying the progression and metastasis of BLCA and identify potential biomarkers. Methods: The expression of peptidase inhibitor 16 (PI16) was analysed using quantitative PCR, immunoblotting and immunohistochemistry assays. The functional roles of PI16 were evaluated using wound healing, transwell, and human umbilical vein endothelial cell tube formation assays, as well as in vivo tumour models. The effects of PI16 on nuclear factor kappa B (NF-kappa B) signalling activation were examined using luciferase reporter gene systems, immunoblotting and immunofluorescence assays. Co-immunoprecipitation was used to investigate the interaction of PI16 with annexin-A1 (ANXA1) and NEMO. Results: PI16 expression was downregulated in bladder cancer tissues, and lower PI16 levels correlated with disease progression and poor survival in patients with BLCA. Overexpressing PI16 inhibited BLCA cell growth, motility, invasion and angiogenesis in vitro and in vivo, while silencing PI16 had the opposite effects. Mechanistically, PI16 inhibited the activation of the NF-kappa B pathway by interacting with ANXA1, which inhibited K63 and M1 ubiquitination of NEMO. Conclusions: These results indicate that PI16 functions as a tumour suppressor in BLCA by inhibiting tumour growth and metastasis. Additionally, PI16 may serve as a potential biomarker for metastatic BLCA.