Reversible oxidation is emerging as an important regulatory mechanism in protein tyrosine phosphorylation. Generation of hydrogen peroxide (H(2)O(2)), upon growth factor stimulation, is hypothesized to inhibit activity of protein tyrosine phosphatases (PTPs). This ensures that protein tyrosine kinases can elevate the steady-state level of protein tyrosine phosphorylation, which then allows propagation of the tyrosine phosphorylation signal. However, the effects of H(2)O(2) on the kinetics of tyrosine phosphorylation signaling remain poorly understood, especially in living cells. Therefore, we used a genetically encoded Src kinase-specific biosensor based on fluorescence resonance energy transfer (FRET) to image the kinetics of the Src-mediated tyrosine phosphorylation signaling (Src signaling) induced by epidermal growth factor (EGF). We examined the kinetics under increased and decreased H(2)O(2) levels. Through a straightforward, quantitative analysis method which characterized the signaling kinetics, we demonstrated that H(2)O(2) modulated the amplitude and duration of the signal by inhibiting PTPs' activity. Our evidence also suggested the effect of H(2)O(2) on Src activation is mediated by H(2)O(2)-dependent inhibition of PTPs. Furthermore, we provide evidence showing global elevation of intracellular H(2)O(2) level attenuates EGF-induced Src signaling.