The leukocyte common antigen-related protein, LAR, is a receptor-like protein tyrosine phosphatase (PTP) which has a wide tissue distribution. Post-translational processing cleaves the proprotein into two non-covalently associated subunits, an extracellular subunit resembling a cell adhesion molecule with three immunoglobulin-like domains and eight fibronectin III-like domains, and a phosphatase subunit containing a short extracellular domain, a transmembrane segment, and tandem cytoplasmic PTP catalytic domains. Current evidence supports a role for LAR in cadherin complexes where it associates with and dephosphorylates beta-catenin, a pathway which may be critical for cadherin complex stability and cell-cell association. LAR also localizes to focal adhesions. Evidence strongly suggests that LAR is involved in axon guidance in the developing nervous system, being localized through association with alpha-liprins. Finally, considerable data support a role for LAR in negatively regulating the insulin receptor signaling. Now that targeting of specific PTPs for therapeutic inhibition is a reality, the clinically relevant pathways requiring LAR must be identified. Inhibition of LAR might improve insulin sensitivity in patients with insulin resistance and type 2 diabetes. Unfortunately, the LAR knockout mouse displays no improvement in insulin sensitivity but rather has defects in terminal mammary gland development and in basal forebrain cholinergic neurons. With LAR being implicated in diverse pathways, additional investigations are needed before clinical targets for therapeutic inhibition of LAR can be predicted. However, selective inhibitors of LAR would be valuable reagents to probe the function of LAR, particularly in animal studies where the most susceptible LAR-dependent pathway(s) must be determined.