The epithelial growth factor receptor plays an important role in cell migration and cancer metastasis, but the underlying molecular mechanism is not fully understood. We show here that differential regulation of the Ras-homology-GTPase-activating protein [corrected] (Rho-GAP) activity of deleted in liver cancer 1 (DLC1) by tensin3 and COOH-terminal tensin-like protein (cten) controls EGF-driven cell migration and transformation. Tensin3 binds DLC1 through its actin-binding domain, a region that is missing in cten, and thereby releases an autoinhibitory interaction between the sterile alpha motif and Rho-GAP domains of DLC1. Consequently, tensin3, but not cten, promotes the activation of DLC1, which, in turn, leads to inactivation of RhoA and decreased cell migration. Depletion of endogenous tensin3, but not cten, augmented the formation of actin stress fibers and focal adhesions and enhanced cell motility. These effects were, however, ablated by an inhibitor of the Rho-associated protein kinase. Importantly, activation of DLC1 by tensin3 or its actin-binding domain drastically reduced the anchorage-independent growth of transformed cells. Our study therefore links dynamic regulation of tensin family members by EGF to Rho-GAP through DLC1 and suggests that the tensin-DLC1-RhoA signaling axis plays an important role in tumorigenesis and cancer metastasis, and may be explored for cancer intervention.