SAP-1 is a transmembrane-type protein-tyrosine phosphatase that is expressed in most tissues but whose physiological functions remain unknown. The cytoplasmic region of SAP-1 has now been shown to bind directly the tyrosine kinase Lck. Overexpression of wild-type SAP-1, but not that of a catalytically inactive mutant of SAP-1, inhibited both the basal and the T cell antigen receptor (TCR)-stimulated activity of Lck in human Jurkat T cell lines. Lck served as a direct substrate for dephosphorylation by SAP-1 in vitro. Overexpression of wild-type SAP-1 in Jurkat cells also: (i) inhibited both the activation of mitogen-activated protein kinase and the increase in cell surface expression of CD69 induced by TCR stimulation; (ii) reduced the extent of the TCR-induced increase in the tyrosine phosphorylation of ZAP-70 or that of LAT; (iii) reduced both the basal level of tyrosine phosphorylation of p62dok, as well as the increase in the phosphorylation of this protein induced by CD2 stimulation; and (iv) inhibited cell migration. These results thus suggest that the direct interaction of SAP-1 with Lck results in inhibition of the kinase activity of the latter and a consequent negative regulation of T cell function.