The tyrosine phosphatase SHP-1 functions as a negative regulator in hematopoietic cell development, proliferation, and receptor-mediated cellular activation. In Jurkat T cells, a major 68-kDa band and a minor 70-kDa band were immunoprecipitated by a monoclonal antibody against the SHP-1 protein-tyrosine phosphatase domain, while an antibody against the SHP-1 C-terminal 19 amino acids recognized only the 68-kDa SHP-1. The SDS-gel-purified 70-kDa protein was subjected to tryptic mapping and microsequencing, which was followed by molecular cloning. It revealed that the 70-kDa protein, termed SHP-1L, is a C-terminal alternatively spliced form of SHP-1. SHP-1L is 29 amino acids longer than SHP-1, and its 66 C-terminal amino acids are different from SHP-1. The C terminus of SHP-1L contains a proline-rich motif PVPGPPVLSP, a potential Src homology 3 domain-binding site. In contrast to SHP-1, tyrosine phosphorylation of SHP-1L is not detected upon stimulation in Jurkat T cells. This is apparently due to the lack of a single in vivo tyrosine phosphorylation site, which only exists in the C terminus of SHP-1 (Y564). COS cell-expressed glutathione S-transferase-SHP-1L can dephosphorylate tyrosine-phosphorylated ZAP70. At pH 7.4, SHP-1L was shown to be more active than SHP-1 in the dephosphorylation of ZAP70. At pH 5.4, SHP-1L and SHP-1 exhibited similar catalytic activity. It is likely that these two isoforms play different roles in the regulation of hematopoietic cell signal transduction.