Protein tyrosine phosphatase nonreceptor type 14 (PTPN14) is frequently mutated in a variety of human cancers. However, the cell signaling pathways regulated by PTPN14 largely remain to be elucidated. Here, we identify a list of potential substrates of PTPN14 using a phospho-proteomic approach. We show that p130 Crk-associated substrate (p130Cas) is a direct substrate of PTPN14 and that PTPN14 specifically regulates p130Cas phosphorylation at tyrosine residue 128 (Y128) in colorectal cancer (CRC) cells. We engineered CRC cells homozygous for a p130Cas Y128F knock-in mutant and found that these cells exhibit significantly reduced migration and colony formation, impaired anchorage-independent growth, slower xenograft tumor growth in nude mice and have decreased phosphorylation of AKT. Furthermore, we demonstrate that SRC phosphorylates p130Cas Y128 and that CRC cell lines harboring high levels of pY128Cas are more sensitive to SRC family kinase inhibitor Dasatinib. These findings suggest that p130Cas Y128 phosphorylation may be exploited as a predictive marker for Dasatinib response in cancer patients. In aggregate, our studies reveal a novel signaling pathway that has an important role in colorectal tumorigenesis.