Protein tyrosine phosphatases (PTPs) constitute a family of receptor-l
ike and cytoplasmic signal transducing enzymes that catalyze the depho
sphorylation of phosphotyrosine residues and are characterized by homo
logous catalytic domains. The crystal structure of a representative me
mber of this family, the 37-kilodalton form (residues 1 to 321) of PTP
1 B, has been determined at 2.8 Angstrom resolution. The enzyme consis
ts of a single domain with the catalytic site located at the base of a
shallow cleft. The phosphate recognition site is created from a loop
that is located at the amino-terminus of an or helix. This site is for
med from an 11-residue sequence motif that is diagnostic of PTPs and t
he dual specificity phosphatases, and that contains the catalytically
essential cysteine and arginine residues. The position of the invarian
t cysteine residue within the phosphate binding site is consistent wit
h its role as a nucleophile in the catalytic reaction. The structure o
f PTP1B should serve as a model for other members of the PTP family an
d as a framework for understanding the mechanism of tyrosine dephospho
rylation.