Homogeneous preparations of a protein phosphatase that is specific for phosphotyrosyl residues (protein tyrosine phosphatase [PTPase] 1B) were isolated from human placenta and microinjected into Xenopus oocytes. This resulted in an increase in activity of up to 10-fold over control levels, as measured in homogenates with use of an artificial substrate (reduced carboxamidomethylated and maleylated lysozyme). Microinjected PTPase was stable for at least 18 h. It is distributed within the oocyte in a manner similar to the endogenous activity and is suggestive of an interaction with cellular structures or molecules located predominantly in the animal hemisphere. The phosphatase markedly retarded (by up to 5 h) maturation induced by insulin. This, in conjunction with the demonstration that PTPase 1B abolished insulin stimulation of an S6 peptide (RRLSSLRA) kinase concomitant with a decrease in the phosphorylation of tyrosyl residues in a protein with the same apparent Mr as the beta subunit of the insulin and insulinlike growth factor 1 receptors (M. F. Cicirelli, N. K. Tonks, C. D. Diltz, E. H. Fischer, and E. G. Krebs, submitted for publication), provides further support for an essential role of protein tyrosine phosphorylation in insulin action. Furthermore, maturation was significantly retarded even when the PTPase was injected 2 to 4 h after exposure of the cells to insulin. PTPase 1B also retarded maturation induced by progesterone and maturation-promoting factor, which presumably do not act through the insulin receptor. These data point to a second site of action of the PTPase in the pathway of meiotic cell division, downstream of the insulin receptor and following the appearance of active maturation-promoting factor.