Phosphatases of regenerating liver (PRL) constitute a subfamily of the protein tyrosine phosphatases that are implicated in oncogenic and metastatic phenotypes. In this study, we evaluated the role of PRL-1 in cell proliferation and metastatic processes in human lung cancer cells. We stably transfected human A549 lung cancer cells with several short hairpin RNAs for PRL-1 and found decreased invasive activity in the resulting clones compared with control cells. In addition, cells with suppressed PRL-1 exhibited greater adherence and cell spreading on fibronectin and a decreased proliferation rate compared with control cells. To address possible mechanisms for the altered phenotypes, we examined known biochemical regulators of adhesion and invasion. Inhibition of PRL-1 decreased c-Src and p130Cas expression and Rac1 and Cdc42 activation without any apparent modification of focal adhesion kinase (FAK) expression. Total tyrosine FAK phosphorylation and Tyr397 phosphorylation levels were continuously elevated in PRL-1 knockdown cells plated on fibronectin. In immunofluorescence studies, reduction in PRL-1 seemed to decrease cell membrane protrusions with a reduction in actin fiber extensions in spite of continuous phosphorylation of Tyr397 FAK, which could reflect reduced adhesion turnover. Our data implicate PRL-1 in the fundamental process of cell adhesion and migration in human lung cancer cells by affecting Rac1, Cdc42, and c-Src activation. These results support the hypothesis that PRL-1 plays an important role in maintaining the malignant phenotype by exploiting Src activation processes, and that PRL-1 could be a promising therapeutic target for cancer metastasis and cell growth.