Many proteins bind to the activated platelet derived growth factor receptor (PDGF-R) either directly or by means of adapter molecules. Up to now all these proteins were shown to transmit and amplify the signal started with PDGF-R stimulation. In a recent study our group has demonstrated that lowM r phosphotyrosine protein phosphatase (LMW-PTP) specifically interacts with PDGF-R in NIH3T3 cells. In the present study we have attempted to clarify the modality of interaction, bothin vivoandin vitro,of these two proteins, using a catalytically inactive LMW-PTP mutant. Our results indicate that LMW-PTP and PDGF-R interact directly, without the necessity of any adapter protein. This interaction leads to PDGF-R dephosphorylation and, presumably, interrupts one or more of the mitogenic pathways that originate from receptor activation.