The transmembrane protein-tyrosine phosphatase (PTP) DEP-1 (density-enhanced phosphatase) is a candidate tumor suppressor in the colon epithelium. We have explored the function of DEP-1 in colon epithelial cells by inducible re-expression in a DEP-1-deficient human colon cancer cell line. Density-enhanced phosphatase-1 re-expression led to profound inhibition of cell proliferation and cell migration, and was associated with cytoskeletal rearrangements. These effects were dependent on the PTP activity of DEP-1 as they were not observed with cells expressing the catalytically inactive DEP-1 C1239S variant. shRNA-mediated suppression of DEP-1 in a colon epithelial cell line with high endogenous DEP-1 levels enhanced proliferation, further supporting the antiproliferative function of DEP-1. Nutrients, which are considered to be chemoprotective with respect to colon cancer development, including butyrate, green tea and apple polyphenols, had the capacity to elevate transcription of endogenous DEP-1 mRNA and expression of DEP-1 protein. Upregulation of DEP-1 expression, and in turn inhibition of cell growth and migration may present a previously unrecognized mechanism of chemoprevention by nutrients.