Protein tyrosine phosphatases (PTPases) are potential tumor suppressor proteins which reverse the effects of protein tyrosine kinases (PTKs). We hypothesized that the induction of PTPase activity by the nutritional agent O-phospho-L-tyrosine (P-Tyr), a broad PTPase substrate, could potentially enhance total cellular PTPase activity and inhibit cell growth. In this study, we report that P-Tyr inhibited the growth of MDA-MB 468 cells in a dose-dependent fashion. P-Tyr incubation increased total cellular PTPase activity in MDA-MB 468 breast carcinoma cells. The increase of PTPase activity, as measured by a standard radioactive assay for PTPases, occurred within 10 min of P-Tyr incubation and was dependent on the concentration and time of incubation with P-Tyr. The increased PTPase activity in P-Tyr treated cells was also evident from a non-isotopic PTPase assay involving the dephosphorylation of epidermal growth factor receptor (EGFR). Epidermal growth factor (EGF)-mediated tyrosine phosphorylation of EGFR was decreased in situ in a time- and dose-dependent manner in P-Tyr-treated cells. Orthovanadate (100 muM for 4 h) inhibited this decrease, implicating the role of cellular PTPase in P-Tyr-mediated control of EGFR tyrosine phosphorylation. Further, EGFR kinase activity was found to be decreased in P-Tyr-treated cells. We conclude that P-Tyr may inhibit cell growth by decreasing cellular tyrosine phosphorylation. Both a decrease in activity of the EGFR kinase and increases in PTPase activity may have accounted for the growth inhibiting property of P-Tyr.