It has long been thought that PTPs (protein tyrosine phosphatases) normally function as tumour suppressors. Recent high-throughput mutational analysis identified loss-of-function mutations in six PTPs in human colon cancers, providing critical cancer genetics evidence that PTPs can act as tumour suppressor genes. PTPRT (protein tyrosine phosphatase receptor-T), a member of the family of type IIB receptor-like PTPs, is the most frequently mutated PTP among them. Consistent with the notion that PTPRT is a tumour suppressor, PTPRT knockout mice are hypersensitive to AOM (azoxymethane)-induced colon cancer. The present review focuses on the physiological and pathological functions of PTPRT as well as the cellular pathways regulated by this phosphatase.