SUMMARYProtein tyrosine phosphorylation is a dynamic reversible process in which the level of phosphorylation,at any point, is the result of phosphatase and/or kinase activity. This balance is critical for control of growth and differentiation. The role of tyrosine phosphatases during nephrogenesis and in kidney disease requires delineation. Appropriate regulation of focal adhesion proteins such as focal adhesion kinase (FAK) and paxillin are important in cell adhesion, migration and differentiation. We have previously shown that bcl-2 -/- mice develop cystic kidneys and exhibit sustained phosphorylation of FAK and paxillin. Here we have examined the expression and activity of focal adhesion tyrosine phosphatases SHP-2, PTP1B and PTP-PEST during normal nephrogenesis and in cystic kidneys from bcl-2 -/- mice. Cystic kidneys from P20 bcl-2 -/- mice demonstrate a reduced expression, a 6-fold decrease in activity and altered distribution of SHP-2 and PTP1B. PTP-PEST expression and distribution were similar in both bcl-2 +/+ and bcl-2 -/- mice. The altered regulation of PTP1B and SHP-2 in kidneys from bcl-2 -/- mice correlates with sustained phosphorylation of FAK and paxillin.Thus, renal cyst formation in the bcl-2 -/- mice may be the result of an inability to complete differentiation due to continued activation of growth processes including activation of FAK and paxillin.