p120-catenin regulates E-cadherin stability at the plasma membrane as well as Rho GTPase activity in the cytoplasm, and also interacts with the transcriptional repressor, Kaiso, in the nucleus. However, the role of different isoforms and the phosphorylated state of p120-catenin in the nucleus is poorly understood. In the present study, we show that p120-catenin isoform 3 interacts with Kaiso in lung cancer cells by immunoprecipitation. Nuclear-cytoplasmic extraction and immunofluorescence confirmed that Kaiso shuttled out of the nucleus via p120-catenin isoform 3. The cytoplasmic enrichment of Kaiso by p120-catenin isoform 3 was abolished due to the inhibition of chromosomal region maintenance-dependent nuclear export via leptomycin. The lung tumor tissue and cell lines expressed higher levels of the serine 288 phosphorylated form. Also, serine 288 phosphorylation in p120-catenin isoform 3 enhanced the binding with Kaiso. Moreover, immunofluorescence and transwell invasion assay showed that the phosphorylation of serine and threonine sites in p120-catenin induced F-actin remodelling and promoted the invasion of lung cancer cells. Collectively, our data establish that p120-catenin isoform 3 regulates the nuclear export of Kaiso and promotes invasion in lung cancer cells via a phosphorylation-dependent mechanism. Serine 288 phosphorylation can contribute to lung cancer progression.