Metastasis-associated phosphatase of regenerating liver-3 (PRL-3) has pleiotropic effects in driving cancer progression, yet the signaling mechanisms of PRL-3 are still not fully understood. Here, we provide evidence for PRL-3–induced hyperactivation of EGFR and its downstream signaling cascades in multiple human cancer cell lines. Mechanistically, PRL-3–induced activation of EGFR was attributed primarily to transcriptional downregulation of protein tyrosine phosphatase 1B (PTP1B), an inhibitory phosphatase for EGFR. Functionally, PRL-3–induced hyperactivation of EGFR correlated with increased cell growth, promigratory characteristics, and tumorigenicity. Moreover, PRL-3 induced cellular addiction to EGFR signaling, as evidenced by the pronounced reversion of these oncogenic attributes upon EGFR-specific inhibition. Of clinical significance, we verified elevated PRL-3 expression as a predictive marker for favorable therapeutic response in a heterogeneous colorectal cancer (CRC) patient cohort treated with the clinically approved anti-EGFR antibody cetuximab. The identification of PRL-3–driven EGFR hyperactivation and consequential addiction to EGFR signaling opens new avenues for inhibiting PRL-3–driven cancer progression. We propose that elevated PRL-3 expression is an important clinical predictive biomarker for favorable anti-EGFR cancer therapy.