P olypeptide hormone signal transmission by receptor tyrosine kinases requires the rapid reversal of tyrosine phosphorylation by protein phosphotyrosine phosphatases (PPTPases). We studied hepatic PPTPases in the rat with emphasis on acute and chronic regulation by insulin. PPTPase activity with artificial substrates ([32P]Tyr-reduced, carboxyamidomethylated, and maleylated lysozyme and [32P]Tyr-poly[glutamic acid:tyrosine] 4:1) was present in distinct membrane, cytoskeletal, and cytosolic fractions. These PPTPase activities were unaffected by alloxan diabetes. Acute administration of insulin to normal animals also did not change PPTPase activity in liver plasma membranes or endosomal membranes. Although alloxan diabetes did not affect PPTPase activity measured with artificial substrates or with epidermal growth factor receptors, a decrease in insulin receptor dephosphorylation was noted. Dephosphorylation of hepatic receptors from normal and diabetic rats by membrane PPTPase from control rats was similar. These results indicate that alloxan diabetes does not lead to a generalized effect on hepatic PPTPase activity, although a substrate-specific decrease in activity with the insulin receptor may occur.