Integrin-mediated focal adhesions connect the extracellular matrix and cytoskeleton to regulate cell responses, such as migration. Protein tyrosine phosphatase α (PTPα) regulates integrin signaling, focal adhesion formation, and migration, but its roles in these events are incompletely understood. The integrin-proximal action of PTPα activates Src family kinases, and subsequent phosphorylation of PTPα at Tyr789 acts in an unknown manner to promote migration. PTPα-null cells were used in reconstitution assays to distinguish PTPα-Tyr789-dependent signaling events. This showed that PTPα-Tyr789 regulates the localization of PTPα and the scaffolding protein Cas to adhesion sites where Cas interacts with and is phosphorylated by Src to initiate Cas signaling. Linking these events, we identify BCAR3 as a molecular connector of PTPα and Cas, with phospho-Tyr789 PTPα serving as the first defined cellular ligand for the BCAR3 SH2 domain that recruits BCAR3-Cas to adhesions. Our findings reveal a novel role of PTPα in integrin-induced adhesion assembly that enables Src-mediated activation of the pivotal function of Cas in migration.