Protein tyrosine phosphatase receptor-type Z (PTPRZ) is aberrantly over-expressed in glioblastoma and a causative factor for its malignancy. However, small molecules that selectively inhibit the catalytic activity of PTPRZ have not been discovered. We herein performed an in vitro screening of a chemical library, and identified SCB4380 as the first potent inhibitor for PTPRZ. The stoichiometric binding of SCB4380 to the catalytic pocket was demonstrated by biochemical and mass spectrometric analyses. We determined the crystal structure of the catalytic domain of PTPRZ, and the structural basis of the binding of SCB4380 elucidated by a molecular docking method was validated by site-directed mutagenesis studies. The intracellular delivery of SCB4380 by liposome carriers inhibited PTPRZ activity in C6 glioblastoma cells, and thereby suppressed their migration and proliferation in vitro and tumor growth in a rat allograft model. Therefore, selective inhibition of PTPRZ represents a promising approach for glioma therapy.