A fluorescent peptide substrate was used to measure dephosphorylation by protein tyrosine phosphatases (PTP) in cell lysates, and single cells and to investigate the effect of environmental toxins on PTP activity in these systems. Dephosphorylation of the substrate by PTPN1 and PTPN2 obeyed Michaelis-Menten kinetics, with KM values of 770 ± 250 nM and 290 ± 54 nM, respectively. Dose-response curves and IC50 values were determined for the inhibition of these two enzymes by the environmental toxins Zn2+ and 1,2-naphthoquinone, as well as pervanadate. In A431 cell lysates, the reporter was a poor substrate for peptidases (degradation rate of 100 ± 8.2 fmol min−1 mg−1) but an excellent substrate for phosphatases (dephosphorylation rate of 1.4 ± 0.3 nmol min−1 mg−1). Zn2+, 1,2-naphthoquinone and pervanadate inhibited dephosphorylation of the reporter in cell lysates with IC50 values of 470 nM, 35 μM, and 100 nM, respectively. Dephosphorylation of the reporter following loading into living single cells occurred at rates of at least 2 pmol min−1 mg−1. When single cells were exposed to 1,2-naphthoquinone (50 μM), Zn2+ (100 μM), and pervandate (1 mM), dephosphorylation was inhibited with median values and first and third quartile values of 41 (Q1 = 0%, Q3 = 96%), 50 (Q1 = 46%, Q3 = 74%), and 53% (Q1 = 36%, Q3 = 77%), respectively, demonstrating both the impact of these toxic exposures on cell signaling and the heterogeneity of response between cells. This approach will provide a valuable tool for the study of PTP dynamics, particularly in small, heterogeneous populations such as human biopsy specimens.