Epidermal growth factor (EGF)- and insulin-dependent mammary epithelial cell mitogenesis is mediated by specific tyrosine kinase receptors. Receptor tyrosine kinase activity is highly regulated in normal cells, whereas amplification of intracellular protein tyrosine phosphorylation is associated with abnormal growth and/or neoplastic transformation. Since protein tyrosine phosphatases (PTPs) are involved in regulating receptor tyrosine kinase signaling, studies were conducted to determine the effects of the PTP inhibitors, vanadate and pervanadate, on mitogen-receptor signal transduction and cell growth. Mammary epithelial cells isolated from midpregnant BALB/c mice were grown within collagen gels and maintained on serum-free media. Treatment with 2-8 microM vanadate or pervanadate greatly increased intracellular protein tyrosine phosphorylation. However, in the presence of optimal mitogenic stimulation (10 ng/ml EGF and 10 microg/ml insulin), these treatments induced a slight, but significant decrease in cell growth. In contrast, these treatments significantly increased mammary epithelial cell growth, albeit less than optimally, under submitogenic culture conditions (500 pg/ml EGF and 10 microg/ml insulin). Neither vanadate nor pervanadate was found to mimic the mitogenic actions of EGF and/or insulin in these cells. The growth-stimulatory effects of PTP inhibitors in submitogenic conditions appear to result from enhanced receptor tyrosine kinase mitogenic signaling, whereas PTP inhibitor attenuation of optimal cell growth may be due to the suppression of PTP activity associated with cell cycle progression. In addition, treatment with PTP inhibitors was not found to stimulate anchorage-independent growth, as determined by the inability of single cells to form colonies in soft agarose. In conclusion, these data demonstrate that optimal mitogen-dependent mammary epithelial cell growth requires both receptor tyrosine kinase and PTP activity. Furthermore, PTP inhibitor-induced amplification of receptor tyrosine kinase mitogenic signaling is not in itself sufficient to induce enhanced cell growth or phenotypic expression of neoplastic transformation.