Phosphatases of regenerating liver (PRLs) are markers of cancer and promote tumor growth. They have been implicated in a variety of biochemical pathways but the physiologically relevant target of phosphatase activity has eluded 20 years of investigation. Here, we show that PRL3 catalytic activity is not required in a mouse model of metastasis. PRL3 binds and inhibits CNNM4, a membrane protein associated with magnesium transport. Analysis of PRL3 mutants specifically defective in either CNNM-binding or phosphatase activity demonstrate that CNNM binding is necessary and sufficient to promote tumor metastasis. As PRLs do have phosphatase activity, they are in fact pseudo-pseudophosphatases. Phosphatase activity leads to formation of phosphocysteine, which blocks CNNM binding and may play a regulatory role. We show levels of PRL cysteine phosphorylation vary in response to culture conditions and in different tissues. Examination of related protein phosphatases shows the stability of phosphocysteine is a unique and evolutionarily conserved property of PRLs. The demonstration that PRL3 functions as a pseudophosphatase has important ramifications for the design of PRL inhibitors for cancer.