Current outcome prediction markers for localized prostate cancer (PCa) are insufficient. The impact of the lipid-modifying Sphingomyelin Phosphodiesterase Acid Like 3B (SMPDL3B) in PCa is unknown. Two cohorts of patients with PCa who underwent radical prostatectomy (n = 40, n = 56) and benign prostate hyperplasia (BPH) controls (n = 8, n = 11) were profiled for SMPDL3B expression with qRT-PCR. Publicly available PCa cohorts (Memorial Sloane Kettering Cancer Centre (MSKCC; n = 131, n = 29 controls) and The Cancer Genome Atlas (TCGA; n = 497, n = 53 controls)) served for validation. SMPDL3B’s impact on proliferation and migration was analyzed in PC3 cells by siRNA knockdown. In both cohorts, a Gleason score and T stage independent significant overexpression of SMPDL3B was seen in PCa compared to BPH (p < 0.001 each). A lower expression of SMPDL3B was associated with a shorter overall survival (OS) (p = 0.005) in long term follow-up. A SMPDL3B overexpression in PCa tissue was confirmed in the validation cohorts (p < 0.001 each). In the TCGA patients with low SMPDL3B expression, biochemical recurrence-free survival (p = 0.011) and progression-free interval (p < 0.001) were shorter. Knockdown of SMPDL3B impaired PC3 cell migration but not proliferation (p = 0.0081). In summary, SMPLD3B is highly overexpressed in PCa tissue, is inversely associated with localized PCa prognosis, and impairs PCa cell migration.