The PTPase family comprises a number of classes of functionally and structurally unrelated enzymes; it represents an important component of the protein-tyrosine phosphorylation/dephosphorylation machinery, which regulates the level of tyrosine phosphorylation of a number of intracellular proteins. A wealth of recently reported data indicates growing interest in a group of PTPases characterized by low (near 20 kDa) molecular weight and high sequence homology (low M(r), PTPases). These enzymes are present in organisms spanning the philogenetic scale, from prokaryotes to yeast and mammals. The sequence homology of the low M(r), PTPases with other classes of PTPases is limited to the active site sequence CXXXXXRS/T, containing the Cys and Arg residues involved in enzyme catalysis found in all PTPases. The X-ray structural data of three enzymes belonging to different classes of PTPases, a bovine liver low M(r), PTPase isoenzyme, PTP1B, and Yersinia PTPase, show that all these enzymes maintain the same active site and overall catalytic mechanism, though displaying different chain foldings and topologies, supporting convergent evolution. Limited findings on the in vivo function of the low M(r), PTPases are presently available; however, an involvement of the mammalian enzymes in the membrane growth factor receptor signal transduction is emerging. The distribution of these enzymes in philogenetically distant unicellular and multicellular organisms supports their participation in important cell functions.