Phosphatase of regenerating liver-3 (PRL-3) has been reported to be associated with colon and gastric cancer metastasis. However, the role and function of PRL-3 in human non-small cell lung cancer cells is unknown. Our studies showed that the expression of PRL-3mRNA and protein are higher in less invasive human lung adenocarcinoma cells than in highly invasive cell lines. Ectopic expression of PRL-3 reduced cell capacity for anchorage-dependent growth, anchorage-independent growth, migration, and invasion in vitro, as well as tumorigenesis in vivo. Conversely, catalytic (C104S) and prenylation-site (C170S) mutants enhanced cell invasion. Microarray profiling of PRL-3 transfectants revealed the pathways potentially involving PRL-3, including the epithelial-mesenchymal transition (EMT), extracellular matrix remodeling, and the WNT signaling pathway. Furthermore, we demonstrated that increased PRL-3 reduced Slug and enhanced E-cadherin gene expression through the AKT/GSK3β/β-catenin pathway. In conclusion, our data suggest that PRL-3 might play a tumor suppressor role in lung cancer, distinct from other cancers, by inhibiting EMT-related pathways.