Protein tyrosine phosphatases (PTP) regulate the proliferation, differentiation, and viability of lymphocytes by modulating their signaling pathways. By using the differential display assay, we have cloned a putative receptor-type PTP, which is predominantly expressed in B-lymphoid tissues (lymph nodes and spleen). This PTP, termed PTPROt (truncated), is a tissue-specific alternatively-spliced form of a human epithelial PTP, PTPRO (PTPU2/GLEPP1). Whereas the epithelial PTPRO includes an approximately 800-amino acid extracellular domain, the major (3 kb) PTPROt cDNA predicts a unique 5' untranslated region and truncated (8 amino acids) extracellular domain with a conserved transmembrane region and single catalytic domain. PTPROt cDNAs encode functional approximately 47-kD and approximately 43-kD PTPs, which are most abundant in normal naive quiescent B cells and decreased or absent in germinal center B cells and germinal center-derived diffuse large B-cell lymphomas. Because PTPROt was predominantly expressed in naive quiescent B cells, the enzyme's effects on cell-cycle progression were examined. When multiple stable PTPROt sense, antisense, and vector only B-cell transfectants were grown in reduced serum and synchronized with nocodazole, PTPROt sense clones exhibited markedly increased G0/G1 arrest. Taken together, these data implicate PTPROt in the growth control of specific B-cell subpopulations.