PTPD1, a cytosolic non-receptor protein-tyrosine phosphatase, stimulates the Src-EGF transduction pathway. Localization of PTPD1 at actin cytoskeleton and adhesion sites is required for cell scattering and migration. Here, we show that during EGF stimulation, PTPD1 is rapidly recruited to endocytic vesicles containing the EGF receptor. Endosomal localization of PTPD1 is mediated by interaction with KIF16B, an endosomal kinesin that modulates receptor recycling at the plasma membrane. Silencing of PTPD1 promotes degradation of EGF receptor and inhibits downstream ERK signaling. We also found that PTPD1 is markedly increased in bladder cancer tissue samples. PTPD1 levels positively correlated with the grading and invasiveness potential of these tumors. Transgenic expression of an inactive PTPD1 mutant or genetic knockdown of the endogenous PTPD1 severely inhibited both growth and motility of human bladder cancer cells. These findings identify PTPD1 as a novel component of the endocytic machinery that impacts on EGF receptor stability and on growth and motility of bladder cancer cells.