We describe the isolation and characterization of a gene (ptpA) from Streptomyces coelicolor A3(2) that codes for a protein with a deduced M(r) of 17,690 containing significant amino acid sequence identity with mammalian and prokaryotic small, acidic phosphotyrosine protein phosphatases (PTPases). After expression of S. coelicolor ptpA in Escherichia coli with a pT7-7-based vector system, PtpA was purified to homogeneity as a fusion protein containing five extra amino acids. The purified fusion enzyme catalyzed the removal of phosphate from p-nitrophenylphosphate (PNPP), phosphotyrosine (PY), and a commercial phosphopeptide containing a single phosphotyrosine residue but did not cleave phosphoserine or phosphothreonine. The pH optima for PNPP and PY hydrolysis by PtpA were 6.0 and 6.5, respectively. The Km values for hydrolysis of PNPP and PY by PtpA were 0.75 mM (pH 6.0, 37 degrees C) and 2.7 mM (pH 6.5, 37 degrees C), respectively. Hydrolysis of PNPP by S. coelicolor PtpA were 0.75 mM (pH 6.0, 37 degrees C) and 2.7 mM (pH 6.5, 37 degrees C), respectively. Hydrolysis of PNPP by S. coelicolor PtpA was competitively inhibited by dephostatin with a Ki of 1.64 microM; the known PTPase inhibitors phenylarsine oxide, sodium vanadate, and iodoacetate also inhibited enzyme activity. Apparent homologs of ptpA were detected in other streptomycetes by Southern hybridization; the biological functions of PtpA and its putative homologs in streptomycetes are not yet known.