Oxidative stress has been implicated in protein phosphorylation and dephosphorylation in cells. In our current studies, H2O2 was shown to reversibly inhibit protein tyrosine phosphatase (PTPase) activity in HER14 cells. H2O2 (150 mM) resulted in 40% inhibition of PTPase activity by 15 min and recovery from inhibition was nearly complete by 60 min. H2O2-induced inhibition or recovery of PTPase activity was not affected by cycloheximide, a protein synthesis inhibitor. L-Buthionine-[S,R]-sulfoximine (BSO), an inhibitor of glutathione synthesis, had no effect on H2O2-induced inhibition of PTPase activity but retarded the recovery of activity. Epidermal growth factor (EGF) and EGTA, a Ca2+ chelator, did not influence H2O2-induced inhibition or recovery of PTPase activity. These results suggest that at least 40% of fibroblast PTPase activity can be regulated by cellular redox activity.