The activities of different kinases have been correlated to the phosphorylation of Wiscott-Aldrich syndrome protein (WASP) by studies in multiple cell systems. The purpose of this study was to elucidate the regulatory mechanisms involved in WASP phosphorylation and the resulting sealing ring formation in osteoclasts. The phosphorylation state of WASP and WASP-interacting proteins was determined in osteoclasts treated with osteopontin or expressing either constitutively active or kinase-defective Src by adenovirus-mediated delivery. In vitro kinase analysis of WASP immunoprecipitates exhibited phosphorylation of c-Src, PYK2, WASP, protein-tyrosine phosphatase (PTP)-PEST, and Pro-Ser-Thr phosphatase-interacting protein (PSTPIP). Phosphorylation of these proteins was increased in osteopontin-treated and constitutively active Src-expressing osteoclasts. Pulldown analysis with glutathione S-transferase-fused proline-rich regions of PTP-PEST revealed coprecipitation of WASP, PYK2, c-Src, and PSTPIP proteins with the N-terminal region (amino acids 294-497) of PTP-PEST. Similarly, interaction of the same signaling proteins, as well as PTP-PEST, was observed with glutathione S-transferase-fused proline-rich regions of WASP. Furthermore, osteopontin stimulation or constitutively active Src expression resulted in serine phosphorylation and inhibition of WASP-associated PTP-PEST. The inhibition of PTP-PEST was accompanied by an increase in tyrosine phosphorylation of WASP and other associated signaling proteins. Experiments with an inhibitor to phosphatase and small interference RNA to PTP-PEST confirmed the involvement of PTP-PEST in sealing ring formation and bone resorption. WASP, which is identified in the sealing ring of resorbing osteoclasts, also demonstrates colocalization with c-Src, PYK2, PSTPIP, and PTP-PEST in immunostaining analyses. Our findings suggest that both tyrosine kinase(s) and the tyrosine phosphatase PTP-PEST coordinate the formation of the sealing ring and thus the bone-resorbing function of osteoclasts.