Erythropoietin (Epo) binding to its receptor (EpoR) induces tyrosine phosphorylation in responsive cells and this ability is required for a mitogenic response. One of the substrates of tyrosine phosphorylation is the Epo receptor (EpoR). The carboxyl region of EpoR cytoplasmic domain is required for EpoR phosphorylation and has been shown to negatively affect the response to Epo both in vivo and in cell lines. Hematopoietic cell phosphatase (HCP) has also been hypothesized to negatively regulate erythropoiesis, based on the hypersensitivity to Epo of erythroid lineage cells in moth-eaten mice that genetically lack HCP. In the studies presented here, we show that HCP binds the tyrosine phosphorylated Epo receptor through the amino-terminal src-homology 2 (SH2) domain of HCP. Using a series of phosphotyrosine-containing peptides, potential HCP binding sites in the cytoplasmic domain of the EpoR are identified. The results support the concept that, after Epo stimulation, phosphorylation of EpoR provides a docking site for HCP in the receptor complex. Recruitment of HCP to the complex and its subsequent dephosphorylation of substrates and/or associated kinases may be important to mitigate the ligand-induced mitogenic response.