Protein tyrosine phosphorylation is crucial in many cellular regulatory mechanisms, including development, stress management, and hormonal responses. However, the precise function of plant protein tyrosine phosphatase (PTP) has not been well elucidated. In this study, we report on the isolation and characterization of an orchid (Phalaenopsis amabilis) PTP gene, referred to as PaPTP1. The cloned PaPTP1 cDNA is 1,588 nucleotides long and the deduced protein sequence composed of 346 amino acid residues. The PaPTP1 gene encodes a classical plant PTP containing a catalytically active cysteine residue within the signature motif. Sequence homology analysis indicated that the predicted amino acid sequence is 57% identical to that of Arabidopsis AtPTP1. To our knowledge, the PaPTP1 is the first classical PTP identified in monocotyledon plant species. Southern blot analysis of genomic DNA revealed the presence of a single PaPTP1 gene in P. amabilis. Expression of PaPTP1 gene was examined in different organs of P. amabilis plants. The result showed that the PaPTP1 gene was abundantly expressed in labella and column of 24-month-old plants, but poorly in leaves. In addition, the PaPTP1 gene expression in response to wounding was investigated. The steady-state level of the PaPTP1 transcript increased significantly in wound-treated leaves. The identity as phosphatase was also demonstrated by characterizing the PaPTP1 expressed as a recombinant glutathione-Stransferase-fusion protein. The enzyme exhibited phosphatase activity towards a synthetic substrate, p-nitrophenolphosphate. Taken together, these results suggest that this PaPTP1 gene encodes a functional protein phosphatase, and its expression patterns are associated with the development of the orchid flowers and in response to wounding.