Previously, we cloned two gene fragments encoding novel protein tyrosine phosphatases, termed PTP-U1 and PTP-U2. Here, we report the full-length sequence, expression, and chromosomal localization of the PTP-U2 gene. The cDNA for PTP-U2, which was obtained from a human normal kidney library, predicts a protein of 1216 amino acids, -140 kDa, that contains a single transmembrane domain and a single intracellular catalytic domain. The extracellular domain of PTP-U2 contains 14 putative N-glycosylation sites and eight repeats of fibronectin type III-like motif. These data suggest that PTP-U2 is structurally similar to HPTP beta and DPTP10D, which have been reported previously. Northern blot analysis revealed that there were two different transcripts for PTP-U2. In kidney and brain, gene expression of PTP-U2 was detected as a 5.4 kb mRNA and in lung and placenta as 3.5 kb. The 3.5 kb transcript was also detected in human leukemia cell lines (eg., U937). Interestingly, its gene expression was enhanced by various differentiation-inducing agents, such as phorbol ester, dihydroxy vitamin D3, retinoic acid, and dimethyl sulfoxide. The bacterially expressed PTP-U2 fusion protein exhibited intrinsic tyrosine phosphatase activity. The PTP-U2 gene was assigned to chromosome 12p13.2-p13.3.