The protein-tyrosine phosphatase PTP-1B is an important regulator of intracellular protein tyrosine phosphorylation, and is itself regulated by phosphorylation. We report that PTP-1B and its yeast analog, YPTP, are phosphorylated and activated by members of the CLK family of dual specificity kinases. CLK1 and CLK2 phosphorylation of PTP-1B in vitro activated the phosphatase activity approximately 3-5-fold using either p-nitrophenol phosphate, or tyrosine-phosphorylated myelin basic protein as substrates. Co-expression of CLK1 or CLK2 with PTP-1B in HEK 293 cells led to a 2-fold stimulation of phosphatase activity in vivo. Phosphorylation of PTP-1B at Ser(50) by CLK1 or CLK2 is responsible for its enzymatic activation. These findings suggest that phosphorylation at Ser(50) by serine threonine kinases may regulate the activation of PTP-1B in vivo. We also show that CLK1 and CLK2 phosphorylate and activate the S. cerevisiae PTP-1B family member, YPTP1. CLK1 phosphorylation of YPTP1 led to a 3-fold stimulation of phosphatase activity in vitro. We demonstrate that CLK phosphorylation of Ser(83) on YPTP1 is responsible for the activation of this enzyme. These findings demonstrate that the CLK kinases activate PTP-1B family members, and this phosphatase may be an important cellular target for CLK action.