Activation of resting T lymphocytes is initiated by rapid but transient tyrosine phosphorylation of a number of cellular proteins. Several protein tyrosine kinases and protein tyrosine phosphatases are known to be important for this response. Here we report that normal T lymphocytes express the B isoform of low molecular weight protein tyrosine phosphatase B (LMPTP-B). The cDNA was cloned from Jurkat T cells, and an antiserum was raised against it. LMPTP immunoprecipitated from resting Jurkat T cells was found to be tyrosine phosphorylated. On stimulation of the cells through their T cell antigen receptor, the phosphotyrosine content of LMPTP-B declined rapidly. In co-transfected COS cells, Lck and Fyn caused phosphorylation of LMPTP, whereas Csk, Zap, and Jak2 did not. Most of the phosphate was located at Tyr-131, and some was also located at Tyr-132. Incubation of wild-type LMPTP with Lck and adenosine 5'-O-(thiotriphosphate) caused a 2-fold increase in the activity of LMPTP. Site-directed mutagenesis showed that Tyr-131 is important for the catalytic activity of LMPTP, and that thiophosphorylation of Tyr-131, and to a lesser degree Tyr-132, is responsible for the activation.