The phosphatases of regenerating liver (PRLs) are a unique family of plasma membrane-associated protein tyrosine phosphatases that have been hypothesized to be involved in metastatic cancer. How PRLs control cancer cell migration, invasion, and proliferation remains largely unknown. In the current study, we demonstrate a role for PRL-1 in the regulation of filamentous actin dynamics, which could promote cell metastatic processes. Human A549 non-small-cell lung cancer cells stably expressing wild-type PRL-1 exhibited a 60% increase in migration and a 3-fold increase in invasion. Cells expressing catalytic mutants of PRL-1 (C104S and D72A) lacked increased cell migration and invasion, indicating that these phenotypic changes required PRL-1 phosphatase activity. In contrast, PRL-1 small interfering RNA decreased in vitro lung cancer cell migration and invasion. The cadherin-catenin complex and dynamic filamentous actin are believed to control cellular invasiveness. Expression of wild-type PRL-1, but not phosphatase-inactive PRL-1 (C104S or D72A), decreased E-cadherin, vinculin, and paxillin expression. Ectopic expression of wild-type PRL-1 increased RhoA levels, which have an important role in actin filament assembly and stabilization of focal adhesion, and decreased activated Cdc42 and Rac. The Rho-associated protein kinase inhibitor, (R)-(+)-trans-4-(1-aminoethyl)-N-(4-pyridyl) cyclohexanecarboxamide dihydrochloride (Y-27632), decreased RhoA activity, actin filament levels, and cellular migration and invasion in PRL-1-expressing cells. These results suggest that PRL-1 could be a productive cancer therapeutic target and support further efforts to identify its substrates.