PRL-3, a metastasis-associated phosphatase, is known to exert its oncogenic functions through activation of PI3K/Akt, which is a key regulator of the rapamycin-sensitive mTOR complex 1 (mTORC1), but a coherent link between PRL-3 and activation of mTOR has not yet been formally demonstrated. We report a positive correlation between PRL-3 expression and mTOR phospho-activation in clinical tumour samples and mouse models of cancer and demonstrate that PRL-3 increased downstream signalling to the mTOR substrates, p70S6K and 4E-BP1, by increasing PI3K/Akt-mediated activation of Rheb-GTP via TSC2 suppression. We also show that PRL-3 increases mTOR translocation to lysosomes via increased mTOR binding affinity to Rag GTPases in an Akt-independent manner, demonstrating a previously undescribed mechanism of action for PRL-3. PRL-3 also enhanced matrix metalloproteinase-2 secretion and cellular invasiveness via activation of mTOR, attributes which were sensitive to rapamycin treatment. The downstream effects of PRL-3 were maintained even under conditions of environmental stress, suggesting that PRL-3 provides a strategic survival advantage to tumour cells via its effects on mTOR.