Normal prostate expresses the receptor protein-tyrosine phosphatase, PTP, whereas LNCaP prostate carcinoma cells do not. PTP has been shown previously to interact with the E-cadherin complex. LNCaP cells express normal levels of E-cadherin and catenins but do not mediate either PTP-or E-cadherin-dependent adhesion. Re-expression of PTP restored cell adhesion to PTP and to E-cadherin. A mutant form of PTP that is catalytically inactive was re-expressed, and it also restored adhesion to PTP and to E-cadherin. Expression of PTP-extra (which lacks most of the cytoplasmic domain) induced adhesion to PTP but not to E-cadherin, demonstrating a requirement for the presence of the intracellular domains of PTP to restore E-cadherinmediated adhesion. We previously observed a direct interaction between the intracellular domain of PTP and RACK1, a receptor for activated protein kinase C (PKC). We demonstrate that RACK1 binds to both the catalytically active and inactive mutant form of PTP. In addition, we determined that RACK1 binds to the PKC␦ isoform in LNCaP cells. We tested whether PKC could be playing a role in the ability of PTP to restore E-cadherin-dependent adhesion. Activation of PKC reversed the adhesion of PTPWT-expressing cells to E-cadherin, whereas treatment of parental LNCaP cells with a PKC␦-specific inhibitor induced adhesion to E-cadherin. Together, these studies suggest that PTP regulates the PKC pathway to restore E-cadherin-dependent adhesion via its interaction with RACK1.A diverse set of cellular behaviors including growth, differentiation, adhesion, and migration are regulated by protein tyrosine phosphorylation. Protein tyrosine kinases and proteintyrosine phosphatases (PTPs) 1 regulate intracellular phosphotyrosine levels. A subfamily of receptor-like PTPs (RPTPs) has extracellular segments containing adhesion molecule-like domains and intracellular segments that possess tyrosine phosphatase activity (1, 2). This structural arrangement suggests that RPTPs directly send signals in response to cell adhesion. The receptor protein-tyrosine phosphatase PTP is a member of the Ig superfamily of adhesion molecules. The extracellular segment of PTP contains a MAM ( (Meprin/A5/PTP ) domain, an Ig domain, and four fibronectin type III repeats (3). Expression of PTP induces aggregation of non-adherent cells (4, 5) through a homophilic binding site that resides within the Ig domain (6). The MAM domain plays a role in cell-cell aggregation by determining the specificity of the adhesive interaction (7). PTP contains a single membrane-spanning region with two cytoplasmic PTP domains. Only the membrane proximal PTP domain has catalytic activity (8). The role of the membrane distal PTP domain is not known, but this domain has been implicated in directing protein-protein interactions in other RPTPs (reviewed in Ref.2). The intracellular juxtamembrane domain of PTP contains a region that is homologous to the conserved intracellular domain of the cadherins (9