A novel 3.6-kb cDNA, IA-2, with a 2,937-bp open reading frame was isolated from a human insulinoma subtraction library (ISL-153). The predicted amino acid sequence and in vitro-translated product of IA-2 cDNA revealed a 979-amino-acid protein with a pI value of 7.09 and a molecular mass of 105,847 daltons. The protein sequence is consistent with a signal peptide, an extracellular domain, a transmembrane region, and an intracellular domain. The extracellular domain contains an unusual cysteine-rich region following the signal peptide. The intracellular cytoplasmic domain of IA-2 possesses highly conserved regions similar to the catalytic domains found in members of the protein tyrosine phosphatase (PTP) family. Northern blot analysis showed that IA-2 mRNA was expressed in five of five freshly isolated human insulinomas, rat and mouse insulinoma cell lines, and enriched normal mouse islets. It also was found in normal human brain, pituitary, pancreas, and brain tumor cell lines, but not in a variety of other normal or tumor tissues. Based on the sequence and expression data, it appears that IA-2 is a new member of the receptor-type PTP family that is expressed in islet and brain tissues.