Glomerular podocytes are critical for the barrier function of the glomerulus in the kidney and their dysfunction causes protein leakage into the urine (proteinuria). Nephrin is a key podocyte protein, which regulates the actin cytoskeleton via tyrosine phosphorylation of its cytoplasmic domain. Here we report that two protein tyrosine phosphatases, PTP1B and PTP-PEST negatively regulate nephrin tyrosine phosphorylation. PTP1B directly binds to and dephosphorylates nephrin, while the action of PTP-PEST is indirect. The two phosphatases are also upregulated in the glomerulus in the rat model of puromycin aminonucleoside nephrosis. Both overexpression and inhibition of PTP1B deranged the actin cytoskeleton in cultured mouse podocytes. Thus, protein tyrosine phosphatases may affect podocyte function via regulating nephrin tyrosine phosphorylation.