Through the development of a new colorimetric and non-radioactive method it is possible to measure PTPase activity in cell extracts. Applying this method we were able to demonstrate that intracellular PTPase activity in chicken embryo fibroblasts increases significantly after RSV induced transformation of these cells. PTPase activity in normal and transformed cells is inhibited by microM concentrations of vanadate, molybdate and zinc ion, but is not affected by mM concentrations of calcium, magnesium and sodium fluoride. The transformation specific activation of the PTPase seems to represent an early parameter during the events of cellular transformation.