The phosphorylation of proteins at tyrosine residues has long been recognized as an important regulatory component of signal transduction. This is areversible process, involving both enzymes that phosphorylate proteins ontyrosine residues as well as a rapidly expanding family of protein tyrosinephosphatases. These latter enzymes bear little resemblance to either theprotein serine and protein threonine phosphatases or to the acid and alkalinephosphatases. In most tissues, the major PTPase is a vanadate- and molybdate-sensitive protein of approximately 40 kDa molecular weight. On the basis of sequence analysis, PTP1B expressed in human placenta exhibits similarities both with the common leukocyte antigen (CD45) and with LAR, ahomolog of the neural adhesion molecule (NCAM). PTPase 1B is synthesized as a 435 amino acid precursor protein which is cleaved to generate the active 321 amino acid enzyme.