Abstract PRL-3 is an oncogenic phosphatase across multiple cancer types, including colon, ovarian, melanoma, breast, and leukemia. While there is increasing interest in developing PRL-3 inhibitors for use in cancer research and treatment, there have been several issues in designing small molecule inhibitors for PRL-3, such as a shallow, negative charged active site, homology between the PRL-3 active site and other protein tyrosine phosphatases, and a high degree of overall homology between PRL-3 and family members PRL-1 and PRL-2. Nanobodies have recently emerged as an immensely useful research tool and show promise as a cancer therapeutic. Nanobodies are small, at ~15kD and lack light chains, allowing them to fit into spaces on target proteins that conventional antibodies cannot normally reach. Other advantages of nanobodies include their stability under stringent conditions, lack of immunogenicity, ability to permeate the cell, and a high specificity and affinity for their antigens. Using full-length PRL-3 protein as an immunogen in alpaca, I used phage display technology to identify alpaca nanobodies that had high affinity for PRL-3 through subtractive panning. I identified 18 unique nanobodies through sequencing; 14 of these were able to be expressed in bacteria and purified. The binding specificity of the nanobodies to PRL-3 over PRL-1 and PRL-2 was determined through an indirect ELISA assay, which showed that that 12 out of 14 anti-PRL-3 nanobodies bound PRL-3 significantly better than PRL-1 or PRL-2 (~25X times higher binding affinity to PRL-3, p<0.0001). I also identified several nanobodies that stabilize PRL-3 structure using a Differential Scanning Fluorescence (DSF) assays to analyze shifts in the melting temperature of PRL-3 following binding, with the ultimate goal of developing PRL-3/nanobody crystal structures to identify nanobody binding sites and find PRL-3 active site binders. Additionally, I have found the 6X-Histidine-tagged nanobodies are useful for PRL-3 western blot, immunoprecipitation, and immunofluorescence, and mCherry-tagged nanobodies (chromobodies) allow for analysis of PRL-3 trafficking. Nanobodies were also tested for their ability to inhibit the phosphatase activity of PRL-3, using both purified protein and functional in vitro assays. Preliminary results showed that several nanobodies decreased PRL-3 phosphatase activity, and cell-based assays to assess how nanobody expression affects PRL-3 function and cellular phenotype are ongoing. Overall, we have developed. both a novel research tool that can be used to gain insight into the structure and function of PRL-3 in normal and cancer cells, and a potentially new biologic inhibitor of PRL-3 that functions with high specificity and potency. Citation Format: Caroline N. Smith, K. Martin Chow, Louis B. Hersh, Jessica S. Blackburn. Identification of nanobodies specific for the oncogenic protein tyrosine phosphatase 4A3 (PTP4A3/PRL-3) that modulate its binding, stability, and phosphatase activity [abstract]. In: Proceedings of the Annual Meeting of the American Association for Cancer Research 2020; 2020 Apr 27-28 and Jun 22-24. Philadelphia (PA): AACR; Cancer Res 2020;80(16 Suppl):Abstract nr 3752.