SHP-2 (Src homology phosphatase type-2) is essential for haematopoietic skeletal and vascular development. Thus the identification of its binding partners is critically important. In the present study, we describe a unique monoclonal antibody, WM78, which interacts with PZR, a SHP-2 binding partner. Furthermore, we identify two novel isoforms of PZR, PZRa and PZRb, derived by differential splicing from a single gene transcription unit on human chromosome 1q24. All are type 1 transmembrane glycoproteins with identical extracellular and transmembrane domains, but differ in their cytoplasmic tails. The PZR intracellular domain contains two SHP-2 binding immunoreceptor tyrosine-based inhibitory motifs (VIY(246)AQL and VVY(263)ADI) which are not present in PZRa and PZRb. Using the WM78 monoclonal antibody, which recognizes the common extracellular domain of the PZR isoforms, we demonstrate that the PZR molecules are expressed on mesenchymal and haematopoietic cells, being present on the majority of CD34(+)CD38(+) and early clonogenic progenitors, and at lower levels on CD34(+)CD38(-) cells and the hierarchically more primitive pre-colony forming units. Interestingly, we show by reverse transcriptase-PCR that the PZR isoforms are differentially expressed in haematopoietic, endothelial and mesenchymal cells. Both PZR and PZRb are present in CD133(+) precursors and endothelial cells, PZRb predominates in mesenchymal and committed myelomonocytic progenitor cells, and all three isoforms occur in erythroid precursor cell lines. Importantly, using SHP-2 mutant (Delta 46-110) and SHP-2 rescue of embryonic fibroblasts stably expressing the PZR isoforms, we demonstrate for the first time that PZR, but not PZRa or PZRb, facilitates fibronectin- dependent migration of cells expressing a competent SHP-2 molecule. These observations will be instrumental in determining the mechanisms whereby PZR isoforms regulate cell motility.