We have identified a human receptor-like protein-tyrosine phosphatase (PTP) in the mammary carcinoma cell line SK-BR-3, which represents the human homolog of murine PTPkappa (Jiang, Y.-P., Wang, H., D'Eustachio, P., Musacchio, J. M., Schlessinger, J., and Sap, J. (1993) Mol. Cell. Biol. 13, 2942-2951) and was therefore termed hPTPkappa. We show here that hPTPkappa expression is dependent on cell density and find it colocalized with two members of the arm family of proteins, beta-catenin and gamma-catenin/plakoglobin, at adherens junctions. Using both in vitro and in vivo binding assays, we demonstrate specific complex formation between endogenous hPTPkappa and beta- and gamma-catenin/plakoglobin. In addition, we present evidence that suggests that beta-catenin may represent a substrate for the catalytic activity of hPTPkappa. The identification of specific binding partners for this receptor-like PTP provides insight into the mechanisms of its biological action and suggests a role for hPTPkappa in the regulation of processes involving cell contact and adhesion such as growth control, tumor invasion, and metastasis.