Functional studies to identify the potential role of a chromosome 3p14-21 gene, protein tyrosine phosphatase receptor type G (PTPRG), were performed. PTPRG was identified as a candidate tumor suppressor gene (TSG) in nasopharyngeal carcinoma (NPC) by differential gene profiling of tumorigenic and nontumorigenic NPC chromosome 3 microcell hybrids (MCH). Down-regulation of this gene was found in tumor segregants when compared with their corresponding tumor-suppressive MCHs, as well as in NPC cell lines and tumor biopsies. Promoter hypermethylation and loss of heterozygosity were found to be important mechanisms contributing to PTPRG silencing. PTPRG overexpression in NPC cell lines induces growth suppression and reduced anchorage-independent growth in vitro. This is the first study to use a tetracycline-responsive vector expression system to study PTPRG stable transfectants. Results indicate its ability to induce significant tumor growth suppression in nude mice under conditions activating transgene expression. These studies now provide functional evidence indicating critical interactions of PTPRG in the extracellular matrix milieu induce cell arrest and changes in cell cycle status. This is associated with inhibition of pRB phosphorylation through down-regulation of cyclin D1. These novel findings enhance our current understanding of how PTPRG may contribute to tumorigenesis.