Deleted in Liver Cancer 1 (DLC1) is a tumour suppressor that encodes a RhoGTPase-activating protein (RhoGAP) and is frequently inactivated in many human cancers. The RhoGAP activity of DLC1 against Rho signalling is well documented and is strongly associated with the tumour suppressor functions of DLC1. However, the mechanism by which the RhoGAP activity of DLC1 is regulated remains obscure. Here, we report that phosphorylation of DLC1 at Ser549 by cyclic AMP-dependent protein kinase A contributes to enhanced RhoGAP activity and promotes the activation of DLC1, which suppresses hepatoma cell growth, motility and metastasis in both in vitro and in vivo models. Intriguingly, we found that Ser549 phosphorylation induces the dimerization of DLC1 and that inducible dimerization of DLC1 can rescue the tumour suppressive and RhoGAP activities of DLC1 containing a Ser549 deletion. Our study establishes a novel regulatory mechanism for DLC1 RhoGAP activity via dimerization induced by protein kinase A signalling.