Using a polymerase chain reaction (PCR) amplification strategy, we identified a novel protein tyrosine phosphatase (PTPase) designated Brain Derived Phosphatase (BDP1). The full length sequence encoded an open reading frame of 459 amino acids with no transmembrane domain and had a calculated molecular weight of 50 kDa. The predicted amino acid sequence contained a PEST motif and accordingly, BDP1 shared the greatest homology with members of the PTP-PEST family. When transiently expressed in 293 cells BDP1 hydrolyzed p-Nitrophenylphosphate, confirming it as a functional protein tyrosine phosphatase. Northern blot analysis indicated that BDP1 was expressed not only in brain, but also in colon and several different tumor-derived cell lines. Furthermore, BDP1 was found to differentially dephosphorylate autophosphorylated tyrosine kinases which are known to be overexpressed in tumor tissues.