PI3K/AKT pathway activation is thought to be a driving force in metastatic melanomas. Members of the pleckstrin homology (PH) domain leucine-rich repeat protein Ser/Thr specific phosphatase family (PHLPP1 and PHLPP2) can regulate AKT activation. By dephosphorylating specific serine residues in the hydrophobic motif, PHLPP1 and PHLPP2 restrain AKT signalings, thereby regulating cell proliferation and survival. We here show that PHLPP1 expression was significantly downregulated or lost and correlated with metastatic potential in melanoma. Forcing expression of either PHLPP1 or PHLPP2 in melanoma cells inhibited cell proliferation, migration, and colony formation in soft agar; but PHLPP1 had the most profound inhibitory effect on metastasis. Moreover, expression of PH mutant forms of PHLPP1 continued to inhibit metastasis, whereas a phosphatase-dead C-terminal mutant did not. The introduction of activated PHLPP1-specific targets AKT2 or AKT3 also promoted melanoma metastasis, while the non-PHLPP1 target AKT1 did not. AKT2 and AKT3 could even rescue the PHLPP1-mediated inhibition of metastasis. An AKT inhibitor blocked the activity of AKT2 and inhibited AKT2-mediated tumor growth and metastasis in a preclinical mouse model. Our data demonstrate that PHLPP1 functions as a metastasis suppressor through its phosphatase activity, and suggest that PHLPP1 represents a novel diagnostic and therapeutic marker for metastatic melanoma.