We have cloned a mitogen-induced gene from human peripheral blood T cells that encodes a 32 kD protein phosphotyrosine phosphatase (designated PAC). PAC is a member of a newly emerging family of PTPases, the VH1 family. Several VH1 family members have interesting properties, including highly regulated expression and phosphatase activity against both phosphorylated ser/thr and tyr residues. PAC protein is observed transiently in mid-G1 following activation via signals that lead to cell division and differentiation. PAC RNA expression is limited to mature and developing hematopoietic tissues (spleen, thymus, and bone marrow). PAC has been localized to the nucleus in transfected COS-7 cells and mitogen-activated T cells. We are currently characterizing PAC phosphatase activity and evaluating several potential phosphorylated nuclear protein substrates. The expression properties of PAC suggest a role in cellular signalling.