Tyrosine phosphorylation of cdc2 is regulated in the cell cycle of mouse 3T3 fibroblasts. Phosphotyrosine in cdc2 is detectable at the onset of DNA synthesis and becomes maximal in the G2 phase of the cell cycle. Quantitative tyrosine dephosphorylation of cdc2 occurs during entry into mitosis and no phosphotyrosine is detected during the G1 phase of the cell cycle. While increasing tyrosine phosphorylation of cdc2 correlates with the formation of a cdc2/p62 complex, the tyrosine phosphorylated cdc2 is inactive as a histone H1 kinase. cdc2 is fully dephosphorylated in its most active mitotic form, yet specific tyrosine dephosphorylation of interphase cdc2 in vitro is insufficient to activate the kinase. In vivo inhibition of tyrosine dephosphorylation by exposure of cells to a phosphatase inhibitor is associated with G2 arrest, which is reversible upon the removal of the phosphatase inhibitor. Tyrosine dephosphorylation of cdc2 may be one of a number of obligatory steps in the mitotic activation of the kinase.