Protein-tyrosine phosphatases (PTPs) are vital for regulating tryosine phos
phorylation in many processes, including growth and differentiation(1,2). T
he regulation of receptor-like PTP (RPTP) activity remains poorly understoo
d, but based on the crystal structure of RPTP alpha domain 1 we have propos
ed that dimerization can negatively regulate activity, through the interact
ion of an inhibitory 'wedge' on one monomer with the catalytic cleft of dom
ain 1 in the other monomer(3,4). Here we show that dimerization inhibits th
e activity of a full-length RPTP in vivo. We generated stable disulphide-bo
nded full-length RPTP alpha homodimers by expressing mutants with single cy
steines at different positions in the ectodomain juxtamembrane region. Expr
ession of wild-type RPTP alpha and Phe135Cys and Thr141Cys mutants in RPTP
alpha-null mouse embryo cells increased dephosphorylation and activity of T
yr529 in the protein tyrosine kinase c-Src; in contrast, expression of a Pr
o137Cys mutant did not. Mutation of Pro 210/211 to leucine in the inhibitor
y wedge of the Pro137Cys mutant restored its ability to activate c-Src, ind
icating that dimerization may inhibit full-length RPTP alpha activity in a
manner stereochemically consistent with RPTP alpha crystal structures(3). O
ur results suggest that RPTP alpha activity can in principle be negatively
regulated by dimerization in vivo.