Background and Aims Transforming growth factor beta (TGF-beta) suppresses early stages of tumorigenesis, but contributes to the migration and metastasis of cancer cells. However, the role of TGF-beta signaling in invasive prometastatic hepatocellular carcinoma (HCC) is poorly understood. In this study, we investigated the roles of canonical TGF-beta/mothers against decapentaplegic homolog 3 (SMAD3) signaling and identified downstream effectors on HCC migration and metastasis. Approach and Results By usingin vitrotrans-well migration and invasion assays andin vivometastasis models, we demonstrated that SMAD3 and protein tyrosine phosphatase receptor epsilon (PTPR epsilon) promote migration, invasion, and metastasis of HCC cellsin vitroandin vivo. Further mechanistic studies revealed that, following TGF-beta stimulation, SMAD3 binds directly to PTPR epsilon promoters to activate its expression. PTPR epsilon interacts with TGFBR1/SMAD3 and facilitates recruitment of SMAD3 to TGFBR1, resulting in a sustained SMAD3 activation status. The tyrosine phosphatase activity of PTPR epsilon is important for binding with TGFBR1, recruitment and activation of SMAD3, and its prometastatic rolein vitro. A positive correlation between pSMAD3/SMAD3 and PTPR epsilon expression was determined in HCC samples, and high expression of SMAD3 or PTPR epsilon was associated with poor prognosis of patients with HCC. Conclusions PTPR epsilon positive feedback regulates TGF-beta/SMAD3 signaling to promote HCC metastasis.