Vascular endothelial growth factor (VEGF) is a major angiogenic factor that triggers formation of new vessels under physiological and pathological conditions. However, the mechanisms that limit the VEGF responses in target cells and hence prevent excessive and harmful angiogenesis are not well understood. Here, our objective was to study whether T-cell protein tyrosine phosphatase (TCPTP, also known as PTN2), which we found to be expressed in human endothelial cells, could alter VEGF signalling by controlling phosphorylation of VEGFR2. We show that a TCPTP substrate-trapping mutant interacts with VEGFR2. Moreover, TCPTP dephosphorylates VEGFR2 in a phosphosite-specific manner, inhibits its kinase activity and prevents its internalization from the cell surface. We found that TCPTP activity is induced upon integrin-mediated binding of endothelial cells to collagen matrix. TCPTP activation was also induced by using cell-permeable peptides from the cytoplasmic tail of the collagen-binding integrin α1. Controlled activation of TCPTP results in inhibition of VEGF-triggered endothelial cell proliferation, angiogenic sprouting, chemokinesis and chemotaxis. We conclude that matrix-controlled TCPTP phosphatase activity can inhibit VEGFR2 signalling, and the growth, migration and differentiation of human endothelial cells.