PTPG, the gene for protein-tyrosine phosphatase gamma (PTP gamma), maps to a region of human chromosome 3, 3p21, that is frequently deleted in renal cell carcinoma and lung carcinoma. One of the functions of protein-tyrosine phosphatases is to reverse the effect of protein-tyrosine kinases, many of which are oncogenes, suggesting that some protein-tyrosine phosphatase genes may act as tumor suppressor genes. A hallmark of tumor suppressor genes is that they are deleted in tumors in which their inactivation contributes to the malignant phenotype. In this study, one PTP gamma allele was lost in 3 of 5 renal carcinoma cell lines and 5 of 10 lung carcinoma tumor samples tested. Importantly, one PTP gamma allele was lost in three lung tumors that had not lost flanking loci. PTP gamma mRNA was expressed in kidney cell lines and lung cell lines but not expressed in several hematopoietic cell lines tested. Thus, the PTP gamma gene has characteristics that suggest it as a candidate tumor suppressor gene at 3p21.