A-kinase anchor protein 121 (AKAP121) and its spliced isoform AKAP84 anchor protein kinase A (PKA) to the outer membrane of mitochondria, focusing and enhancing cyclic AMP signal transduction to the organelle. We find that AKAP121/84 also binds PTPD1, a src-associated protein tyrosine phosphatase. A signaling complex containing AKAP121, PKA, PTPD1, and src is assembled in vivo. PTPD1 activates src tyrosine kinase and increases the magnitude and duration of epidermal growth factor (EGF) signaling. EGF receptor phosphorylation and downstream activation of ERK 1/2 and Elk1-dependent gene transcription are enhanced by PTPD1. Expression of a PTPD1 mutant lacking catalytic activity inhibits src and downregulates ERK 1/2 but does not affect the activity of c-Jun N-terminal kinase 1/2 and p38alpha mitogen-activated protein kinase. AKAP121 binds to and redistributes PTPD1 from the cytoplasm to mitochondria and inhibits EGF signaling. Our findings indicate that PTPD1 is a novel positive regulator of src signaling and a key component of the EGF transduction pathway. By binding and/or targeting the phosphatase on mitochondria, AKAP121 modulates the amplitude and persistence of src-dependent EGF transduction pathway. This represents the first example of physical and functional interaction between AKAPs and a protein tyrosine phosphatase.