PRL-3 is a key gene associated with progression and metastasis of colorectal cancer. Recently PRL-3 was suggested to promote epithelial mesenchymal transition (EMT) by downregulating E-cadherin expression. But the mechanisms of EMT induced by PRL-3 remain largely unknown. Here we found that PRL-3 could also promote EMT in a colorectal cancer cell model SW480 with deficient E-cadherin expression in vivo and in vitro. PRL-3 stable overexpression or knockdown SW480 cells were injected subcutaneously into nude mice. Immunohistochemical analyses of tumor samples from nude mice showed that PRL-3 promoted upregulation of mesenchymal marker vimentin and downregulation of epithelial markers E-cadherin and cytokeratin. Glycogen synthase kinase-3beta inactivated by PRL-3 as assessed by phosphospecific antibodies was a key event in EMT induced by PRL-3. Inhibition of glycogen synthase kinase-3beta by lithium chloride, a highly selective inhibitor, leading to phosphorylation of glycogen synthase kinase-3beta increased Snail expression. In order to identify the direct effects of PRL-3, we isolated CDH22, one member of cadherin family, as a new candidate of interacting proteins of PRL-3 in yeast two-hybrid systems, and the interaction was confirmed in vitro by GST pull-down assay or in exogenous cell systems and endogenous colorectal cancer cells by co-immunoprecipitation assay and co-localization analysis. We observed that PRL-3 promoted downregulation of CDH22 expression. Interestingly, expression of E-cadherin was recovered in SW480 cells after PRL-3 was knocked-down. Our results first linked PRL-3 to cadherin directly. It provided new insights into the regulatory mechanisms of EMT induced by PRL-3.