A putative protein tyrosine phosphatase (PTPase) gene, PTP2, was cloned from Saccharomyces cerevisiae. The complete yeast PTP2 gene encodes a 750-amino acid residue protein with a predicted mass of 86 kDa. The conserved PTPase domain was localized in the C-terminal half of the protein. Amino acid sequence alignment of the yeast PTPase domain with other phosphatases indicated approximately 20-25% sequence identity with the mammalian PTPase and a similar degree of identity with the PTPase encoded by the yeast PTP1 gene. The PTP2 gene is closely linked to the yeast RET1 and STE4 genes and is localized on the right arm of chromosome 15. Gene disruption experiments demonstrated that neither PTP2 alone nor PTP2 in combination with PTP1 was essential for growth under the conditions tested. The ability of PTP2 to complement the cdc25-22 mutant of Schizosaccharomyces pombe was also examined, and unlike the human T-cell PTPase, which was able to complement the cdc25-22 mutant, the S. cerevisiae PTP2 was unable to complement the cdc25-22 mutant of S. pombe.