A family of protein tyrosine phosphatases enriched within the central nervous system called striatal enriched phosphatase (STEP) has been implicated in the regulation of the N-methyl-d-aspartate receptor. STEP(61), a membrane-associated isoform located in the postsynaptic densities (PSDs) of striatal neurons, contains two transmembrane domains, two proline-rich domains, and a kinase-interacting motif. This study demonstrates that STEP(61) associates with Fyn, a member of the Src family kinases that is also enriched in PSDs. By using human embryonic kidney 293 cells for co-transfection, we determined that a substrate-trapping variant (STEP(61) CS) binds to Fyn but not to other members of the Src family present in PSDs. In a complementary experiment, myc-tagged Fyn immunoprecipitates STEP(61) CS. STEP(61) binds to Fyn through one of its proline-rich domains and the kinase-interacting motif domain, whereas Fyn binds to STEP(61) through its Src homology 2 domain and the unique N-terminal domain. STEP(61) CS pulls down Fyn when the Tyr(420) site is phosphorylated. In vitro, wild-type STEP(61) dephosphorylates Fyn at Tyr(420) but not at Tyr(531). These results suggest that STEP regulates the activity of Fyn by specifically dephosphorylating the regulatory Tyr(420) and may be one mechanism by which Fyn activity is decreased within PSDs.