Corkscrew (csw) encodes a nonreceptor protein tyrosine phosphatase (PTPase) that has been implicated in signaling from the Torso receptor tyrosine kinase (RTK). csw mutations, unlike tor mutations, are associated with zygotic lethality, indicating that Csw plays additional roles during development. We have conducted a detailed phenotypic analysis of csw mutations to identify these additional functions of Csw. Our results indicate that Csw operates positively downstream of other Drosophila RTKs such as the Drosophila epidermal growth factor receptor (DER), the fibroblast growth factor receptor (Breathless), and likely other RTKs. This model is substantiated by specific dosage interactions between csw and DER. It is proposed that Csw is part of the evolutionarily conserved "signaling cassette" that operates downstream of all RTKs. In support of this hypothesis, we demonstrate that SHP-2, a vertebrate PTPase similar to Csw and previously implicated in RTK signaling, encodes the functional vertebrate homologue of Csw.