Biliary glycoprotein (Bgp) is a member of the immunoglobulin superfamily and the carcinoembryonic antigen family. Previous studies have shown that Bgp functions as an intercellular adhesion molecule and a canalicular bile salt transporter. Moreover, we and others demonstrated that Bgp can inhibit colonic and prostatic tumor cell growth in vivo, through a mechanism which depends on sequences present in its cytoplasmic domain. In this study, we have examined the possibility that the cytoplasmic domain of Bgp can interact with signal transduction molecules. We showed that tyrosine phosphorylated Bgp, expressed in mouse colon carcinoma CT51 cells, could reversibly associate with protein tyrosine phosphatase SHP-1. Mutation of either of two tyrosine residues present in the cytoplasmic domain of Bgp abrogated SHP-1 binding, suggesting that this association was mediated by both tyrosine residues. Similarly, we noted that either of the two SH2 domains of SHP-1 could bind tyrosine phosphorylated Bgp in vitro. It is therefore conceivable that some of the functions of Bgp are mediated through its ability to induce intracellular protein tyrosine dephosphorylation.