We have studied the expression of the nontransmembrane tyrosine phosphatase gene erp during mouse development using in situ hybridization analysis. The results show that during the early postimplantational stages of development, erp expression is observed only in maternally derived decidual cells surrounding the developing embryo. At day 10.5, erp is weakly expressed in the embryo in the neural tube, hind gut, and other embryonic structures. However, in 12.5-day embryos, erp is present in most organs, with the highest expression restricted to the developing neural system. During later development, at day 17.5, the levels of erp decline in some neural structures but remain high in others, like the dorsal root ganglia. High levels of erp expression are maintained in several parts of adult brain, such as cortical layers, thalamus, hypothalamus, and hippocampus. High levels of erp transcripts are also observed in the cerebellar cortex, in the Purkinje cell layer, and in the granular cell layer. In all tissues analyzed, the expression of erp corresponds to regions undergoing terminal cell differentiation and/or regions where cell proliferation has declined.