A human cDNA encoding a novel protein tyrosine phosphatase has been isolated. The phosphatase has unique features in its domain structure: a "Zn-hand" domain containing several SH3-binding motifs, a tyrosine phosphatase domain, a C-terminal PEST motif, and an N-terminal domain similar to yeast BRO1, an apoptosis-related mammalian AIP1 and to a RHO-binding protein, Rhophilin. The gene is located at chromosome 3p21.3, an area frequently deleted in many types of cancer, especially within the functionally defined narrow region. The gene may be a human homolog of the rat PTP-TD14 gene reported by others, which can suppress H-ras-mediated transformation. We identified a hemizygous missense mutation in a lung cancer cell line. Thus, the phosphatase gene may be a candidate for one of the tumor suppressor genes located on 3P21.3.