PRL family constitutes a unique class of phosphatases associated with metastasis. The phosphatase activity of PRL has been reported to be important for promoting metastasis, and it is inactivated by reversible oxidation of its catalytic cysteine. Here, we show that TRP32 specifically reduces PRL. Reduction of oxidized PRL in cells is inhibited by 2,4-dinitro-1-chlorobenzene, an inhibitor of TRX reductase. In vitro assays for the reduction of PRL show that only TRP32 can potently reduce oxidized PRL, whereas other TRX-related proteins linked to TRX reductase show little or no reducing activity. Indeed, TRP32 knockdown significantly prolongs the H2O2-induced oxidation of PRL. Binding analyses reveal that the unique C-terminal domain of TRP32 is required and sufficient for its direct interaction with PRL. These results suggest that TRP32 maintains the reduced state of PRL and thus regulates the biological function of PRL.