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