Receptor protein tyrosine phosphatase (RPTPs) are involved in many cellular processes, including the regulation of adhesion, migration and cellular signaling. Many RPTPs are putative tumor suppressors because of the transcriptional and translational changes observed in their expression during tumorigenesis. Recently, RPTPs were shown to be post-translationally regulated during tumorigenesis by proteolysis in a manner similar to proteolysis of the Notch receptor. There is accumulating evidence that proteolysis of RPTPs influence their cellular function and that RPTP fragments may function as oncogenes. By exploiting what is known about RPTP ligand binding domains and crystal structures of ligand-RPTP interfaces, we describe novel molecular diagnostics that have been or can be developed to identify tumor margins and target tumor tissues.