Tyrosine phosphorylation, controlled by the coordinated actions of pro
tein tyrosine phosphatases (PTPs) and kinases (PTKs), is a critical co
ntrol mechanism for numerous physiological processes, including growth
, differentiation, metabolism, cell cycle regulation and cytoskeletal
function. Originally, PTKs were believed to be the key enzymes control
ling the dynamic process of tyrosine phosphorylation in vivo, with a s
mall number of PTPs playing largely housekeeping roles. Unexpected str
uctural diversity within a large family of PTPs called this idea into
question. Approximately 75 PTPs have been identified, including both r
eceptor-like and nontransmembrane enzymes, with genome sequencing data
predicting the existence of similar to 500 human PTPs. These enzymes
are characterized by the presence of a conserved catalytic domain of s
imilar to 240 residues, containing the unique signature motif, [I/V]HC
xAGxxR[S/T]G that defines this enzyme family (see accompanying minirev
iew by Denu et al., 1996 [this issue of Cell]), fused, at either the N
- or C-terminal ends, to a variety of noncatalytic, regulatory sequenc
es. Now, several studies have illustrated subtleties of regulation and
diversity of function for the PTPs which at least match those of the
PTKs. Furthermore, PTPs can have both positive and negative effects on
cellular signaling. This minireview discusses selected recent example
s in which insights have been gained into the physiological function o
f PTP family members.