T‐cell protein tyrosine phosphatase (TC‐PTP, encoded by PTPN2) is a nonreceptor PTP that is most highly expressed in hematopoietic tissues. TC‐PTP modulates a variety of physiological functions including cell cycle progression, cell survival and proliferation, and hematopoiesis through tyrosine dephosphorylation of its target substrates, such as EGFR, JAK1, JAK3, STAT1, and STAT3. Studies with whole or tissue‐specific loss of TC‐PTP function transgenic mice have shown that TC‐PTP has crucial roles in the regulation of the immune response, insulin signaling, and oncogenic signaling. More recently, the generation of epidermal‐specific TC‐PTP‐deficient mice for use in multistage skin carcinogenesis bioassays demonstrated that TC‐PTP suppresses skin tumor formation by negatively regulating STAT3 and AKT signaling. Further investigation showed that TC‐PTP also minimizes UVB‐induced epidermal cell damage by promoting apoptosis through the negative regulation of Flk‐1/JNK signaling. These findings provide major evidence for a tumor suppressive function for TC‐PTP against environment‐induced skin cancer. Here, we will discuss TC‐PTP, its substrates, and its functions with an emphasis on its role in skin carcinogenesis.