We have isolated a cDNA from human foetal brain cDNA library which encodes a putative transmembrane protein bearing an intracellular protein tyrosine phosphatase (PTPase) like domain. The PTPase like domain contains an alanine to aspartate amino acid change relative to other PTPases in the catalytic core domain. This amino acid change is found in only three other known proteins, islet cell autoantigens; human, murine and rat IA-2, murine IA-2b and its rat orthologue phogrin, which have a similar overall structure to ICAAR, and the recently identified X-linked myotubular myopathy (MTM1) gene. ICAAR, IA-2 and IA-2b clearly represent a new family of PTP-like proteins for which catalytic activity has yet to be demonstrated. An abundant ICAAR mRNA is detectable in the brain and pancreas but not in the other normal human tissues surveyed. We have localised ICAAR to human chromosome 7q36.