Many lymphocyte signaling pathways are regulated by protein tyrosyl phosphorylation, which is controlled by protein tyrosine kinases (PTKs) and protein tyrosine phosphatases (PTPs). Substantial progress has been made in defining the functions of lymphocyte PTPs. Individual PTPs can enhance or diminish cell signaling levels. The transmembrane PTP CD45 is a key positive element in multiple lymphocyte signaling pathways in vivo. New insights into the function of individual CD45 isoforms have emerged. Anti-CD45 antibodies with potent immunosuppressant activity have been identified, suggesting that CD45 may be a propitious target for drug design. Progress has also been made in elucidating the function and targets of specific nontransmembrane PTPs, particularly those with Src homology 2 domains.