Deregulated Her2/ErbB2 receptor tyrosine kinase drives tumorigenesis and tumor progression in a variety of human tissues. Her2 transmits oncogenic signals through phosphorylation of its cytosolic domain. To study innate cellular mechanisms for containing Her2 oncogenic phosphorylation, a siRNA phosphatase library was screened for cellular phosphatase(s) that enhance phosphorylation in the signaling motif of Her2 after knockdown. We found that silencing protein tyrosine phosphatase PTPN13 significantly augmented growth factor-induced phosphorylation of the Her2 signaling domain and promoted the invasiveness of Her2-deregulated cancer cells. In addition, we discovered that growth factor-induced phosphorylation of PTPN13 was essential for the dephosphorylation of Her2 suggesting a negative feedback mechanism induced by growth factor to inhibit cellular Her2 activity through PTPN13. Importantly, we showed that PTPN13 mutations previously reported in human tumors significantly reduced the phosphatase activity of PTPN13, and consequently elevated the oncogenic potential of Her2 and the invasiveness of Her2-overexpressing human cancer cells. Taken together, these results suggest that cellular PTPN13 inhibits Her2 activity by dephosphorylating the signal domain of Her2 and plays a role in attenuating invasiveness and metastasis of Her2 overactive tumors.