Tyrosine phosphorylation and dephosphorylating events have been shown to be central to the process of growth regulation and signal transduction. We report here, the identification of a new gene with a tyrosine phosphatase domain (EC 3.1.3.48) which is expressed exclusively in thymus and spleen. A cDNA of 2760 bp encodes a 339-amino acid, intracellular, single-domain tyrosine phosphatase. When expressed as a glutathionine-S-transferase fusion protein, efficient lysis of p-nitrophenyl phosphate is noted, indicating in vitro enzymatic activity of the cloned gene product. Normal mouse lymphocytes increase mRNA expression 10-15-fold upon stimulation with phytohemagglutinin, concanavalin A, lipopolysaccharide or anti-CD3 monoclonal antibody. This new hematopoietic tyrosine phosphatase, (HePTP), may play a role in the regulation of T and B lymphocyte development and signal transduction.