The receptor for the growth and motility factor, hepatocyte growth factor/scatter factor (HGF/SF), is a transmembrane tyrosine kinase encoded by the MET oncogene. Previous work has shown that receptor phosphorylation on tyrosine is critical for both kinase activation and association with intracellular signal transducers. In this paper, we report that a protein tyrosine phosphatase activity (PTP) coprecipitates with the HGF/SF receptor. The associated PTP activity correlates with the kinase activation of the receptor, increasing up to 5-fold over the basal level after HGF/SF stimulation. The increase is reversible and time- and dose-dependent. A comparable level of activity is associated with constitutively tyrosine-phosphorylated receptors immunoprecipitated from cells where the MET oncogene is amplified and overexpressed. In these cells, a parallel decrease in PTP activity is observed after inhibition of receptor tyrosine phosphorylation following protein kinase C activation. The associated PTP activity is effective in dephosphorylating the HGF/SF receptor. These data show that a protein tyrosine phosphatase is functionally coupled to the HGF/SF receptor.