Many malignant cells release the NKG2D ligand ULBP2 from their cell surface to evade immunosurveillance by NK cells and CD8 T cells. Although the shedding mechanism remains unclear, various inhibitors of matrix metalloproteinases have been shown to efficiently block the release of soluble ULBP2. The clinical use of these inhibitors, however, is limited because of adverse side effects. Using high-throughput screening technique, we identified a specific inhibitor of phosphatase of regenerating liver 3 (PRL-3) that could reduce the level of soluble ULBP2 in the culture supernatant of various cancer cell lines. Inhibition or gene knockdown of PRL-3 did not reduce ULBP2 shedding, but rather suppressed posttranslational maturation of ULBP2, resulting in intracellular retention of immature ULBP2. We then found that ULBP2 was constitutively associated with heat shock protein HSP60. Complete maturation of ULBP2 required tyrosine phosphorylation of HSP60 which was mediated by PRL-3.