This study has investigated the interaction of protein tyrosine phosphatases (PTP's) with their substrates both at the level of recognition and catalysis using three approaches. First, the one mechanism for substrate recognition by three intracellular PTP's (PTP-1, PTP-5, and YOP-51) and two transmembrane PTP's (CD45 and LAR). Acidic residues in several positions were found to affect peptide reactivity with all the PTP's tested. The intracellular PTP's that were tested all had similar responses to N-terminal acidic residues, but were quite distinct from the transmembrane PTP's (CD45 and LAR), which were also found to differ from one another. The second approach addressed whether these PTP's show a broad or narrow substrate specificity using a variety of peptides corresponding to tyrosine phosphorylation sites of proteins that are known or believed to be physiologically relevant PTP substrates. These experiments found that all five PTP's had a broad substrate specificity. However, each PTP did show some ability to discriminate amongst these peptides, and the magnitude of this discrimination was found to vary from PTP to PTP (from 400-fold for YOP-51 to 22-fold for CD45). Using these divergant peptides, the three intracellular PTP's were once again found to have similar substrate specificities, and this specificity was quite distinct from that of either CD45 or LAR. Additionally, CD45 and LAR were also found to have different substrate specificities. To get a better understanding of how PTP's carry out substrate recognition and catalysis, chemical modification studies were performed to search for active site residues in PTP-1. The arginine specific modifying reagent, phenylglyoxal, was found to inactivate PTP-1 and kinetic analysis of this reaction indicated that only one mole of phenylglyoxal was needed to inactivate one mole of PTP-1. Furthermore, this inactivation could be inhibited by a peptide substrate, consistent with the modified arginine residue being in the active site. Additional studies using (7-[superscript]14C) phenylglyoxal indicated that two arginine residues were being modified. Studies are currently under way to determine whether inactivation corresponds to modification of one, or both arginine residues.