T cell activation represents a balance between positive and negative signals delivered via distinct cell surface molecules. Many cytoplasmic protein tyrosine phosphatases are involved in regulating cellular responses by antagonizing the action of protein tyrosine kinases. CD148 is a receptor-type protein tyrosine phosphatase expressed by all human mononuclear cells. We have investigated the effect of CD148 on TCR-mediated activation of human T cells. Overexpression of wild-type, but not a phosphatase-deficient, CD148 in Jurkat T cells inhibited TCR-mediated activation, evidenced by reduced expression of the early activation Ag CD69, inhibition of tyrosine phosphorylation of many intracellular proteins including the critical protein tyrosine kinase ZAP-70, and impairment of mitogen-activated protein kinase activation. Taken together, these results suggest that CD148 is an important phosphatase involved in negatively regulating the proximal signaling events during activation of Ag-specific T cells.