The transforming growth factor-β (TGF-β) signaling pathway is believed to contribute to carcinoma development by increasing cell invasiveness and metastasis and inducing the epithelial-to-mesenchymal transition (EMT). Protein phosphatase PPM1A has been reported to dephosphorylate TGF-β-activated Smad2/3, thus inhibiting the TGF-β signaling pathway. In this study, we investigated the role of PPM1A in bladder cancer. PPM1A protein expression was analyzed in 145 bladder cancer specimens. The loss of PPM1A expression was predictive of poor survival and high muscle-invasiveness. PPM1A was more commonly deficient among muscle-invasive relapse samples compared to primary tumors in twenty paired bladder cancer tissues. Functional studies indicated that blockade of PPM1A through lentivirus-mediated RNA interference significantly promoted urinary bladder cancer (BCa) cell motility, the EMT in vitro and metastasis in vivo, and these effects were dependent on the TGF-β/Smad signaling pathway. The increase in p-Smad2/3 induced by TGF-β1 correlated with the degree of PPM1A depletion in BCa cells, which resulted in an altered expression profile of TGF-β-inducible genes. The correlations between PPM1A and biomarkers related to the TGF-β signaling pathway and tumor invasion were also detected in BCa samples. These results demonstrate that loss of PPM1A is associated with the development of tumor invasion in bladder cancer.