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Abstract Background Recently the role of microRNAs has been explored immensely as novel regulators and potential biomarkers in several cancers. MiR-509-3p is one such miRNA that has been observed to show a mixed expression in different cancers, while it’s expression and clinical relevance in colorectal cancer (CRC) has not yet been characterized. Methods We used quantitative PCR to evaluate the expression of miR-509-3p in fresh-frozen CRC tumor tissues and the corresponding tumor-adjacent normal (NAT) tissues from 103 patients. Subsequently, functional studies were performed to further interpret the role of the miRNA in CRC. Results MiR-509-3p was found to be overexpressed in CRC tissues in nearly 80% of cases and was associated with an aggressive disease presentation. Notably, a higher expression of the miRNA promoted cell proliferation, migration, and invasion of CRC cells in in vitro and in vivo models. Mechanistically, we confirmed that miR-509-3p directly binds the 3’UTR of the tumor suppressor PHLPP2 and inhibits its expression. Furthermore, within the previous 103 clinical tissue specimens, we observed an overexpression of miR-509-3p within the NAT tissue of patients associated with a poor disease prognosis. Using multivariate analysis, it was observed that the expression of miR-509-3p within the NAT tissue was an independent predictor of prognosis in CRC. At the cellular level, through indirect coculture experiments, miR-509-3p was observed to regulate the proliferative, migratory, and invasive behavior of normal colon cells. Conclusion MiR-509-3p strongly contributes to the development and progression of CRC and can potentially function as a prognostic biomarker in the disease.