Protein tyrosine phosphorylation plays an important role in the transduction of extracellular signals. The prototypical protein tyrosine kinases are localized at the plasma membrane and are coupled to receptors that bind extracellular factors. Thus, protein tyrosine phosphorylation was previously thought to occur only in the cytoplasm. However, several cytoplasmic tyrosine kinases have recently been found to enter the nucleus; and resident nuclear proteins, such as the catalytic subunit of RNA polymerase II, have been found to be phosphorylated on tyrosine. Nuclear tyrosine kinases may participate in the regulation of transcription, the cell cycle and possibly other nuclear processes.