Cellular growth, di erentiation and migration is regulated by protein tyrosine phosphorylation. Receptor-like protein tyrosine phosphatases are thus likely to be key regulators of vital cellular processes. The regulation of these enzymes is in general poorly understood. Ligands have been identi®ed only for a small subset of the receptor-like protein tyrosine phosphatases and in no case has upregulation of the speci®c activity by extracellular ligands been demonstrated. Prompted by earlier ®ndings of ligands for receptor-like protein tyrosine phosphatases in extracellular matrix we investigated if Matrigel TM , a preparation of extracellular matrix proteins, contained modulators of the speci®c activity of the receptor-like protein tyrosine phosphatase DEP-1. Matrigel TM stimulation of cells increased the speci®c activity of immunoprecipitated DEP-1. Also, incubation of immunoprecipitated DEP-1 with Matrigel TM led to an increase in DEP-1 activity, which was blocked by soluble DEP-1 extracellular domain. Finally, immunoprecipitated DECD-DEP-1, a mutant form of DEP-1 lacking most of the extracellular domain, failed to respond to Matrigel TM stimulation. These experiments identify Matrigel TM as a source of DEP-1 agonist(s) and provide the ®rst evidence for upregulation of the speci®c activity of receptor-like protein tyrosine phosphatases by extracellular ligands. Oncogene (2001) 20, 5219 ± 5224.