The steady state of protein tyrosyl phosphorylation in cells is regulated by the opposing action of tyrosine kinases and protein tyrosine phosphatases (PTPs). Several groups have independently identified a non-transmembrane PTP, designated SH-PTP1 (also known as PTP1C, HCP and SHP), which is primarily expressed in hematopoietic cells and characterized by the presence of two SH2 domains N-terminal to the PTP domain. SH2 domains generally mediate the association of regulatory molecules with specific phosphotyrosinecontaining sites on autophosphorylated receptors, thereby controlling the initial interaction of receptors with these substrates. A second and much more widely expressed PTP with SH2 domains, SH-PTP2 (also designated PTP1D and Syp), has been identified. Strong sequence similarity between SH-PTP2 and the Drosophila gene corkscrew (CSW) and their similar patterns of expression suggest that SH-PTP2 is the human corkscrew homolog.