The major intracellular protein tyrosine phosphatase (PTP1B) is a 50kDa protein, localized to the endoplasmic reticulum. This PTP is recovered in the particulate fraction of mammalian cells and can be solubilized as a complex of 150 kDa by extraction with non-ionic detergents. Previous work from this laboratory implicated phosphorylation of serine/threonine residues in the regulation of this PTP. Activity was several-fold higher in cells treated with activators of cAMP-dependent or Ca2+/phospholipid-dependent protein kinases or inhibitors of protein phosphatase 2A. Here we show that these treatments result in more than an 8-fold increase in the phosphorylation of the 50 kDa PTP catalytic subunit within the 150kDa form of the phosphatase in HeLa cells. The phosphorylation occurred exclusively on serine residues, and the same tryptic and cyanogen bromide 32P-phosphopeptides were recovered in the PTP from control and stimulated cells. Either multiple kinases phosphorylate a common site in the PTP1B, or a single kinase is activated 'downstream' of cAMP- and Ca2+/phospholipid-dependent kinases. The results indicate that phosphorylation of a serine residue in the segment 283-364, probably serine 352 in the sequence Lys-Gly-Ser-Pro-Leu, occurs in response to cell stimulation. Phosphorylation in this region of PTP1B, between the N-terminal catalytic domain and the C-terminal membrane localization segment, is proposed to regulate phosphatase activity.