CD45, a leukocyte-specific protein tyrosine phosphatase involved in signal transduction, has previously been shown to associate with a 32-kDa phosphoprotein in human T-lymphocytes and T-lymphoma cell lines. The 32-kDa protein was purified and its coding cDNA cloned. Since expression of the protein was found to be restricted to B- and T-lymphocytes it was termed LPAP (lymphocyte phosphatase-associated phosphoprotein). LPAP exists in two differentially phosphorylated forms in resting human T-lymphocytes c, both of which undergo alterations during T-lymphocyte activation. Analysis of LPAP protein and mRNA expression in CD45-deficient mutant T-cell lines suggests that LPAP protein is subjected to degradation in the absence of its binding partner, CD45. Stable expression of LPAP protein seems to require particular portions of CD45 distinct from the phosphatase domains. In pervanadate-treated human T-lymphocytes LPAP undergoes phosphorylation on tyrosine residues in vivo. Since tyrosine phosphorylation of LPAP is undetectable in T-lymphocytes expressing enzymatically active CD45, these data suggest that LPAP likely represents a novel substrate for CD45.