Density-enhanced protein-tyrosine phosphatase-1 (DEP-1 also CD148) is a transmembrane molecule with a single intracellular PTP domain. It has recently been proposed to function as a tumor suppressor. We have previously shown that DEP-1 dephosphorylates the activated platelet-derived growth factor (PDGF) β-receptor in a site-selective manner (Kovalenko et al.(2000). J. Biol. Chem. 275, 16219–16226). We analysed cell lines with inducible DEP-1 expression for cellular functions of DEP-1. Several aspects of PDGFβ-receptor signaling were negatively affected by DEP-1 expression. These include PDGF-stimulated activation of inositol trisphosphate formation, Erk1/2, p21Ras, and Src. Activation of receptor-associated phosphoinositide-3 kinase activity and of Akt/PKB were weakly attenuated at early time points of stimulation. Inhibition of PDGF-stimulated signaling depended on DEP-1 catalytic activity. Importantly, DEP-1 inhibited PDGF-stimulated cell migration. The catalytically inactive DEP-1 C1239S variant enhanced cell migration and PDGF-stimulated Erk1/2 activation, suggesting a dominant negative interference with endogenous DEP-1. In contrast to cell migration, cell–substrate adhesion was promoted by active DEP-1 and delayed or suppressed by DEP-1 C1239S, correlating with positive effects of DEP-1 on adhesion-stimulated Src kinase. We propose that negative regulation of growth-factor stimulated cell migration and promotion of cell–matrix adhesion may be related to the function of DEP-1 as tumor suppressor.