We have isolated and characterized a series of 18 chemically induced alleles of Ptp69D ranging in strength from viable to worse than null, which represent unique tools for probing the structure, function, and signaling pathway of DPTP69D. Three alleles are strongly temperature sensitive and were used to define the developmental periods requiring DPTP69D function; adult health requires DPTP69D during the mid- to late-pupal stage, eclosion requires DPTP69D during the early to mid-larval stage, and larval survival requires DPTP69D during embryogenesis. Mutations predicted to abolish the phosphatase activity of the membrane proximal D1 domain severely reduce but do not abolish DPTP69D function. Six alleles appear null; only 20% of null homozygotes pupate and <5% eclose, only to fall into the food and drown. One allele, Ptp69D(7), confers axon and viability defects more severe than those of the null phenotype. Sequence analysis predicts that Ptp69D(7) encodes a mutant protein that may bind but not release substrate. Like mutations in the protein tyrosine phosphatase gene Dlar, strong Ptp69D alleles cause the ISNb nerve to bypass its muscle targets. Genetic analysis reveals that the bypass defect in Dlar and Ptp69D mutants is dependent upon DPTP99A function, consistent with the hypothesis that DPTP69D and DLAR both counteract DPTP99A, allowing ISNb axons to enter their target muscle field.