Cancer-associated fibroblasts (CAF) constitute a major component of the tumor microenvironment. The effects of CAFs on the progression of colorectal cancer remain controversial. In this study, we found the ectopic overexpression of Fibronectin leucine-rich transmembrane protein 3 (FLRT3) inhibited the process of epithelial-mesenchymal transition (EMT), as well as the proliferation, migration, invasion, and promote apoptosis of colorectal cancer cells, whereas silencing FLRT3 expression resulted in the opposite phenomenon. FLRT3 downregulation was associated with a poor prognosis in colorectal cancer. Also, FLRT3 expression was significantly related to some clinicopathologic factors, including T stage (P = 0.037), N stage (P = 0.042), and E-cadherin (P = 0.002) level. Via univariate and multivariate analyses, M stage (P < 0.0001), FLRT3 (P = 0.044), and E-cadherin (P = 0.003) were associated with overall survival and were independent prognostic factors for it. Mechanistically, CAFs secreted TGF-β, which downregulated FLRT3 expression by activating SMAD4 to promote aggressive phenotypes in colorectal cancer cells. Moreover, FLRT3 repressed tumorigenesis and lung metastasis, which could be reversed by LY2109761, a dual inhibitor of TGF-β receptor type I and II. Treatment with LY2109761 increased IFN-γ expression in CD8+ T cells and reduced the number of regulatory T cells in the tumor microenvironment. Taken together, we revealed the metastasis-suppressive function of FLRT3, which was attenuated during the CAFs-mediated activation of the TGF-β/SMAD4 signaling pathway to promote EMT in colorectal cancer. LY2109761 that significantly inhibited metastasis could be a new treatment option for advanced colorectal cancer. Implications: CAFs enhance colorectal cancer aggressiveness by reducing FLRT3 expression through activating TGF-β/SMAD4 signaling pathway. CAF-targeted therapy and/or LY2109761 were promising treatments for colorectal cancer.