The purification and partial characterization of low molecular weight phosphotyrosine phosphatase (LMW-PTP) was reported for the first time in PC12 cells. In addition, the expression levels during neuronal phenotype induction by nerve growth factor (NGF) and during neurogenesis in chick embryos were investigated. LMW-PTP was purified to homogeneity and showed a single band of about 18 kDa with sodium dodecyl sulfate polyacrylamide gel electrophoresis. A native molecular mass of 20.1 kDa was determined by gel filtration on Sephadex G-75 column. The LMW-PTP from PC12 cells displays structural and biochemical characteristics similar to the enzyme isolated for normal tissues. It was specifically immunoprecipitated by an affinity purified antibody directed against the bovine liver enzyme. The enzyme is present in the cytosolic and cytoskeletal cell compartment where is tyrosine phosphorylated. Time course expression of LMW-PTP in PC12 cells was investigated after NGF treatment and showed an increase of about 30% in the basal level of LMW-PTP from 0 to 72 h. These changes were related to the appearance in PC12 cells of neuronal processes and to a decrease in cell proliferation. An increase of the LMW-PTP expression was also observed in vivo during chick embryo neurogenesis from 8-day-old embryos to adult chicks. The protein level, assayed by immunoblotting, increases from 14-day-old embryos to the hatched chicks reaching the adult levels within the first week after birth. These data indicate that the neurogenesis process is accompanied by a physiological increment of LMW-PTP expression in vitro and in vivo.