The tyrosine phosphatase r-PTPeta is able to suppress the malignant phenotype of rat thyroid tumorigenic cell lines. To identify r-PTPeta interacting proteins, a yeast two-hybrid screening was performed and an insert corresponding to the full-length syntenin cDNA was isolated. It encodes a protein containing two PDZ domains that mediates the binding of syntenin to proteins such as syndecan, proTGF-alpha, beta-ephrins and neurofascin. We show that r-PTPeta is able to interact with syntenin also in mammalian cells, and although syntenin is a tyrosine-phosphorylated protein it is not a substrate of r-PTPeta. The integrity of both PDZ domains of syntenin and the carboxy-terminal region of r-PTPeta are required for the interaction between syntenin and r-PTPeta.