Density-Enhanced Phosphatase-1 (DEP-1) de-phosphorylates various growth factor receptors and adhesion proteins to regulate cell proliferation, adhesion and migration. Moreover, dep-1/scc1 mutations have been detected in various types of human cancers, indicating a broad tumor suppressor activity. During C. elegans development, DEP-1 mediates binary cell fate decisions by negatively regulating EGFR signaling. Using a substrate-trapping DEP-1 mutant in a proteomics approach, we have identified the C. elegans β-integrin subunit PAT-3 as a specific DEP-1 substrate. DEP-1 selectively de-phosphorylates tyrosine 792 in the membrane-proximal NPXY motif to promote integrin activation via talin recruitment. The non-phosphorylatable β-integrin mutant pat-3(Y792F) partially suppresses the hyperactive EGFR signaling phenotype caused by loss of dep-1 function. Thus, DEP-1 attenuates EGFR signaling in part by de-phosphorylating Y792 in the β-integrin cytoplasmic tail, besides the direct de-phosphorylation of the EGFR. Furthermore, in vivo FRAP analysis indicates that the αβ-integrin/talin complex attenuates EGFR signaling by restricting receptor mobility on the basolateral plasma membrane. We propose that DEP-1 regulates EGFR signaling via two parallel mechanisms, by direct receptor de-phosphorylation and by restricting receptor mobility through αβ-integrin activation.