Two low M(r) phosphotyrosine protein phosphatases have been isolated from rat liver. The enzymes were previously known as low M(r) acid phosphatases, but several recent studies have demonstrated that this family of enzymes possesses specific phosphotyrosine protein phosphatase activity. We determined the complete amino acid sequences of the two isoenzymes and named them AcP1 and AcP2. Both consist of 157 amino acid residues, are acetylated at the NH2-terminus, and have His as the COOH-terminus. The molecular weights calculated from the sequences are 18,062 for AcP1 and 17,848 for AcP2. They are homologous except in the 40-73 zone, where about 50% of residues are different. This fact suggests that the two isoenzymes are produced by an alternative splicing mechanism. There is no homology between these two isoenzymes and the receptor-like phosphotyrosine protein phosphatases LAR, CD45, human placenta PTPase 1B, and rat brain PTPase-1. AcP1 and AcP2 are also distinct from rat liver PTPase-1 and PTPase-2, since these last enzymes have higher molecular weights. AcP1 differs from AcP2 with respect to (1) substrate affinity and (2) its sensitivity to activators and inhibitors, thus suggesting a their different physiological function.