To determine the expression of various protein-tyrosine phosphatases (PTPs) in human gastric cancers, cDNAs encoding conserved PTP domains were amplified by reverse transcriptase polymerase chain reaction from KATO-III cell mRNA and sequenced. Among 72 polymerase chain reaction clones, one of the cDNA sequences encoded a novel potential PTP (stomach cancer-associated PTP, SAP-1). The full length (3.9 kilobases) of the SAP-1 cDNA was further isolated from the KATO-III cell cDNA library and the WiDr cell cDNA library. The predicted amino acid sequence of the SAP-1 cDNA showed that mature SAP-1 consisted of 1093 amino acids and a transmembrane-type PTP, which possessed a single PTP-conserved domain in the cytoplasmic region. The extracellular region of SAP-1 consisted of eight fibronectin type III-like structure repeats and contained multiple N-glycosylation sites. These data suggest that SAP-1 is structurally similar to HPTP beta and that SAP-1 and HPTP beta represent a subfamily of transmembrane-type PTPs. SAP-1 was mainly expressed in brain and liver and at a lower level in heart and stomach as a 4.2-kilobase mRNA, but it was not detected in pancreas or colon. In contrast, among cancer cell lines tested, SAP-1 was highly expressed in pancreatic and colorectal cancer cells. The bacterially expressed SAP-1 fusion protein had tyrosine-specific phosphatase activity. Immunoblotting with anti-SAP-1 antibody showed that SAP-1 is a 200-kDa protein. In addition, transient transfection of SAP-1 cDNA to COS cells resulted in the predominant expression of a 200-kDa protein recognized by anti-SAP-1 antibody. SAP-1 is mapped to chromosome 19 region q13.4 and might be related to carcinoembryonic antigen mapped to 19q13.2.