We used an RNAi-mediated loss-of-function screen to study systematically the role of the protein tyrosine phosphatase (PTP) superfamily of enzymes in mammary epithelial cell motility in the absence or presence of the oncoprotein tyrosine kinase ERBB2. We report that although shRNAs directed against most of the PTP family were without effect, suppression of three PTPs-PRPN23, PTPRG, and PTPRR-enhanced cell motility. Furthermore, we found that suppression of PTPN23, but not PTPRG or PTPRR, induced cell invasion. Suppression of PTPN23 increased E-cadherin internalization, impaired early endosome trafficking of E-cadherin, induced the expression of mesenchymal proteins, and caused cell scattering. The activity of SRC and b-catenin was elevated when PTPN23 was suppressed. Moreover, we identified SRC, E-cadherin, and b-catenin as direct substrates of PTPN23. Inhibition of SRC with the small molecular inhibitor SU6656 blocked the effects of PTPN23 depletion. These findings suggest that loss of PTPN23 may increase the activity of SRC and the phosphorylation status of the E-cadherin/b-catenin signaling complex to promote tumor growth and invasive behavior in breast cancer. In addition, our studies highlight functional specificity among PTPs and reveal new roles for PTPs in mammary epithelial cell biology.