Tyrosine phosphorylation of proteins is required for signal transaction in cells and for growth regulation. A mitogen-induced gene (PAC-1) has been cloned from human T cells and encodes a 32-kilodalton protein that contains a sequence that defines the enzymatic site of known protein phosphotyrosine phosphatases (PTPases). Other than this sequence, PAC-1 is different from several other known related PTPases exemplified by PTP-1b. PAC-1 is similar to a phosphatase induced by mitogens or heat shock In fibroblasts, a yeast gene, and a vaccinia virus - encoded serine-tyrosine phosphatase (VH1). PAC-1 was predominantly expressed in hematopoietic tissues and localized to the nucleus in transfected COS-7 cells and in mitogen-stimulated T cells.