Vascular smooth muscle cell (VSMC) migration and growth are positively regulated by protein tyrosine phosphorylation. Therefore, a dephosphorylation process controlled by protein tyrosine phosphatases (PTPs) must also be critical. The present study identified six cytoplasmic PTPs expressed in VSMCs: low M-r protein tyrosine phosphatase (LMW-PTP), SHP-2, PTP36, PTP2, PTP1B, and FAP1. We further examined the functions of LMW-PTP in VSMCs using the adenovirus-mediated gene transfer of recombinant LMW-PTP. PDGF-induced activation of p38, but not of ERK MAP kinase, was blocked by LMW-PTP. LMW-PTP as well as the p38 inhibitor SB203580 inhibited DNA synthesis and cell migration upon PDGF stimulation. LMW-PTP dephosphorylated activated PDGF receptors in NIH3T3 cells, but not in VSMCs. Thus, LMW-PTP negatively regulates PDGF functions by inhibiting the p38 pathway in VSMCs although its substrate is unclear. These findings strongly demonstrate that PTPs are important as negative regulators for VSMC growth and migration, processes that are closely related to the progression of atherosclerosis.