A number of protein-tyrosine phosphatase(s) (PTPases) have been shown to dephosphorylate the insulin receptor in vitro; however, it is not known whether any individual PTPase has specificity for certain phosphotyrosine residues of the receptor that regulate its intrinsic tyrosine kinase activity. We evaluated the deactivation of the insulin receptor kinase by three candidate enzymes that are expressed in insulin-sensitive rat tissues, including the receptor-like PTPases LAR and LRP, and the intracellular enzyme, PTPase1B. Purified insulin receptors were activated by insulin and receptor dephosphorylation, and kinase activity was quantitated after incubation with recombinant PTPases from an Escherichia coli expression system. When related to the level of overall receptor dephosphorylation, LAR deactivated the receptor kinase 3.1 and 2.1 times more rapidly than either PTPase1B or LRP, respectively (p less than 0.03). To assess whether these effects were associated with preferential dephosphorylation of the regulatory (Tyr-1150) domain of the receptor beta-subunit, we performed tryptic mapping of the insulin receptor beta-subunit after dephosphorylation by PTPases. Relative to the rate of initial loss of 32P from receptor C-terminal sites, LAR dephosphorylated the Tris-phosphorylated Tyr-1150 domain 3.5 and 3.7 times more rapidly than either PTPase1B or LRP, respectively (p less than 0.01). The accelerated deactivation of the insulin receptor kinase by LAR and its relative preference for regulatory phosphotyrosine residues further support a potential role for this transmembrane PTPase in the physiological regulation of insulin receptors in intact cells.