Prior studies have demonstrated that phosphatase of regenerating liver-3 (PRL-3) serves avital function in cell proliferation and metastasis in breast cancer. However, the molecular mechanisms underlying the function of PRL-3 in breast cancer remain unknown. PRL-3 expression was analyzed in 24 pairs of breast cancer and normal tissues using the reverse transcription-quantitative polymerase chain reaction assay. The results of the present study identified that the expression of PLR-3 in breast cancer tissues was increased 4.2-fold, compared with normal tissues. Notably, overexpression of PRL-3 significantly promoted the proliferation of cancer cells and inhibited endogenous p53 expression by downregulating the expression level of p14 alternate reading frame (p14(ARF)). In addition, decreased expression levels of PRL-3 resulted in decreased breast cancer cell proliferation and increased expression level of p14(ARF). These results suggested that PRL-3 enhances cell proliferation by downregulating p14(ARF) expression, which results in decreased levels ofp53. The results of the present study demonstrated that PRL-3 promotes tumor proliferation by affecting the p14(ARF)-p53 axis, and that it may serve as a prognostic marker for patients with breast cancer.