The ZAP-70 protein-tyrosine kinase plays a central role in signaling from the T cell antigen receptor. Recruitment and activation of ZAP-70 are transient and are terminated by phosphorylation of negative regulatory tyrosine residues and dephosphorylation of positively acting sites. We report that the low molecular weight protein-tyrosine phosphatase (LMPTP) specifically dephosphorylates the negative regulatory Tyr-292 of ZAP-70, thereby counteracting inactivation of ZAP-70. Expression of low levels of LMPTP resulted in increased ZAP-70 phosphorylation, presumably at the activating Tyr-493 and other sites, increased kinase activity, and augmented downstream signaling to the mitogen-activated protein kinase pathway. The ZAP-70 Y292F mutant was not affected by LMPTP. Our results indicate that LMPTP, like CD45, dephosphorylates a negative regulatory tyrosine site in a protein-tyrosine kinase and thereby strengthens T cell receptor signaling.