Interferons (IFNs) induce early-response genes by stimulating Janus family (Jak) tyrosine kinases, leading to tyrosine phosphorylation of Stat transcription factors. Previous studies implicated protein-tyrosine phosphatase (PTP) activity in the control of IFN-regulated Jak/Stat signaling, but the specific PTPs responsible remained unidentified. We have found that SH2 domain-containing PTP1 (SHPTP1; also called PTP1C, HCP, or SHP) reversibly associates with the IFN-␣ receptor complex upon IFN addition. Compared with macrophages from normal littermate controls, macrophages from motheaten mice, which lack SHPTP1, show dramatically increased Jak1 and Stat1␣ tyrosine phosphorylation, whereas Tyk2 and Stat2 activation is largely unaffected. These findings correlate with selectively increased complex formation on a gamma response element, but not an IFN-stimulated response element, in motheaten macrophages. Our results establish that SHPTP1 selectively regulates distinct components of Jak/Stat signal transduction pathways in vivo.Interferons (IFNs) were the first of many cytokines and growth factors that were found to stimulate the expression of early-response genes by inducing the tyrosine phosphorylation of SH2 domain-containing transcription factors (subsequently termed Stats) (20, 21). Tyrosine phosphorylation of Stat proteins induces them to form homodimeric and/or heterodimeric complexes, which translocate to the nucleus and interact with similar elements in a variety of enhancers to promote transcription. Janus family protein-tyrosine kinases (PTKs) are integral components of the signaling cascades regulated by cytokines that activate Stats (17).Recent work in many laboratories has identified several downstream components of IFN-␣/ signaling. Two subunits (␣ and ) of the IFN-␣/ receptor (IFN␣/R) have been molecularly cloned (28,44). Binding of IFN-␣/ to its receptor results in rapid activation of the Janus PTKs Jak1 and Tyk2. This results in tyrosyl phosphorylation of both Stat1␣ (p91) and Stat2 (p113) and the formation of at least two transcription factor complexes. One complex, composed of a heterotrimer of Stat1␣, Stat2, and the DNA-binding component p48, binds to IFN-stimulated response elements (ISREs) (12,13,30