We show here that PRL-3 protein is expressed in fetal heart, developing blood vessels, and pre-erythrocytes but not in their mature counterparts. These observations imply that PRL-3 may be involved in the early development of the circulatory system. Because PRL-3 mRNA had been reported to be consistently elevated in metastatic samples derived from colorectal cancers, we attempted to investigate if PRL-3 might be involved in tumor angiogenesis and if PRL-3-expressing cells could cross-talk to human umbilical vascular endothelial cells (HUVEC) by using an in vitro coculture system. HUVECs were grown with fibroblasts, which were later overlaid with PRL-3-expressing cells. We observed that both PRL-3-expressing Chinese hamster ovary (CHO) cells and PRL-3-expressing DLD-1 human colon cancer cells could redirect the migration of HUVECs toward them; in addition, PRL-3-expressing DLD-1 cells could enhance HUVEC vascular formation. In vivo injection of PRL-3-expressing CHO cells into nude mice to form local tumors resulted in the recruitment of host endothelial cells into the tumors and initiation of angiogenesis. We further showed that PRL-3-expressing cells reduced interleukin-4 (IL-4) expression levels and thus attenuated IL-4 inhibitory effects on the HUVEC vasculature. Our findings provide direct evidence that PRL-3 may be involved in triggering angiogenesis and establishing microvasculature and it may serve as an attractive therapeutic target with respect to both angiogenesis and cancer metastasis. (Cancer Res 2006; 66(19): 9625-35)