A mouse phosphotyrosine phosphatase containing two Src homology 2 (SH2) domains, Syp, was identified. Syp bound to autophosphorylated epidermal growth factor (EGF) and platelet-derived growth factor (PDGF) receptors through its SH2 domains and was rapidly phosphorylated on tyrosine in PDGF- and EGF-stimulated cells. Furthermore, Syp was constitutively phosphorylated on tyrosine in cells transformed by v-src. This mammalian phosphatase is most closely related, especially in its SH2 domains, to the corkscrew (csw) gene product of Drosophila, which is required for signal transduction downstream of the Torso receptor tyrosine kinase. The Syp gene is widely expressed throughout embryonic mouse development and in adult tissues. Thus, Syp may function in mammalian embryonic development and as a common target of both receptor and nonreceptor tyrosine kinases.