The phosphatase of regenerating liver (PRL) family, comprising PRL-1, PRL-2 and PRL-3, is a group of prenylated phosphatases that are candidate cancer biomarkers and therapeutic targets. Although several studies have documented that altered expression of PRL-1 or PRL-3 can influence cell proliferation, migration and invasion, there is a dearth of knowledge about the biological functions of PRL-2. Thus, in the current study we have evaluated the role of PRL-2 in cell migration and invasion in human cancer cells. We found that four human lung cancer cells, including A549 cells, overexpress PRL-2 when compared with normal lung cells. PRL-2 knockdown by RNA interference markedly inhibited cell migration and invasion, and this inhibition can be restored by overexpressing the short interference RNA (siRNA)-resistant vector HA-PRL-2m. PRL-2 suppression by siRNA decreased p130Cas and vinculin expression, and decreased extracellular signal-regulated kinase (ERK) phosphorylation, while increasing the phosphorylation of ezrin on tyrosine 146. We found no significant changes in total p53, Akt and c-Src expression levels or their phosphorylation status, suggesting that PRL-2 knockdown could inhibit tumor cell migration and invasion through a Src-independent p130Cas signaling pathway. Ectopic expression of wild-type PRL-2, a catalytic inactive C101S mutant and a C-terminal CAAX deletion revealed a requirement for both the PRL-2 catalytic functionality and prenylation site. Expression of wild-type but not mutant forms of PRL-2 caused ERK phosphorylation and nuclear translocation. These results support a model in which PRL-2 promotes cell migration and invasion through an ERK-dependent signaling pathway.