Previous study in our laboratory demonstrated suppression of the gene for protein tyrosine phosphatase receptor-type O (PTPRO) in primary and established rat hepatomas. The present study showed methylation-mediated silencing of this gene in primary human lung tumors and in several human lung cancer cell lines, one of the characteristics of many tumor-suppressor genes. The reduced expression of PTPRO in the primary lung tumors correlated with the methylation status of its CpG island. Demethylation of the gene by deoxy-5-azacytidine treatment led to its reactivation in a lung cancer line (A549). Overexpression of PTPRO in A549 cells inhibited anchorage-independent growth, delayed reentry of the cells into the cell cycle after release from cell-cycle arrest, and increased susceptibility of the cells to apoptosis. These data have demonstrated the growth-suppressor characteristics of PTPRO that are unique to a classical tumor suppressor.