The protein-tyrosine phosphatases (PTPs) form a large family of signaling proteins with essential functions in embryonic development and adult physiology. The PTPs are characterized by an absolutely conserved catalytic site cysteine with a low pK(a) due to its microenvironment, making it vulnerable to oxidation. PTPs are differentially oxidized and inactivated in vitro and in living cells. Many cellular stimuli induce a shift in the cellular redox state towards oxidation and evidence is accumulating that at least part of the cellular responses to these stimuli are due to specific, transient inactivation of PTPs, indicating that PTPs are important sensors of the cellular redox state.