The abnormality of surfactant protein C (SFTPC) has been linked to the development of a number of interstitial lung diseases, according to mounting evidence. Nonetheless, the function and mechanism of SFTPC in the biological progression of lung adenocarcinoma (LUAD) remain unclear. Analysis of public datasets and testing of clinical samples suggested that SFTPC expression was abnormally low in LUAD, which was associated with the onset and poor prognosis of LUAD. The SFTPC-related risk score was derived using least absolute shrinkage and selection operator Cox regression as well as multivariate Cox regression. The risk score was highly correlated with tumor purity and tumor mutation burden, and it could serve as an independent prognostic indicator for LUAD. Low-risk LUAD patients may benefit more from CTLA-4 or/and PD-1 inhibitors. Overall, the risk score is useful for LUAD patient prognostication and treatment guidance. Moreover, in vitro and in vivo experiments demonstrated that SFTPC inhibits the proliferation of LUAD by inhibiting PI3K/AKT/mTOR signaling transduction. These results reveal the molecular mechanism by which SFTPC inhibits the proliferation of LUAD and suggest that SFTPC could be a new therapeutic target for LUAD.