Cell-cell communication in multicellular organisms depends on the dynamic and reversible phosphorylation of protein tyrosine residues. The receptor-linked protein tyrosine phosphatases (RPTPs) receive cues from the extracellular environment and are well placed to influence cell signaling. However, the direct events downstream of these receptors have been challenging to resolve. We report here that the homophilic receptor PTPRK is stabilized at cell-cell contacts in epithelial cells. By combining interaction studies, quantitative tyrosine phosphoproteomics, proximity labeling and dephosphorylation assays we identify high confidence PTPRK substrates. PTPRK directly and selectively dephosphorylates at least five substrates, including Afadin, PARD3 and δ-catenin family members, which are all important cell-cell adhesion regulators. In line with this, loss of PTPRK phosphatase activity leads to disrupted cell junctions and increased invasive characteristics. Thus, identifying PTPRK substrates provides insight into its downstream signaling and a potential molecular explanation for its proposed tumor suppressor function.