Increased tyrosine phosphorylation has been correlated with human cancer, including breast cancer. In general, the activation of tyrosine kinases (TKs) can be antagonized by the action of protein-tyrosine phosphatases (PTPs). However, in some cases PTPs can potentiate the activation of TKs. In this study, we have investigated the functional role of PTPε in human breast cancer cell lines. We found the up-regulation and activation of receptor PTPε (RPTPε) in MCF-7 cells and MDA-MB-231 upon PMA, FGF, and serum stimulation, which depended on EGFR and ERK1/2 activity. Diminishing the expression of PTPε in human breast cancer cells abolished ERK1/2 and AKT activation, and decreased the viability and anchorage-independent growth of the cells. Conversely, stable MCF-7 cell lines expressing inducible high levels of ectopic PTPε displayed higher activation of ERK1/2 and anchorage-independent growth. Our results demonstrate that expression of PTPε is up-regulated and activated in breast cancer cell lines, through EGFR, by sustained activation of the ERK1/2 pathway, generating a positive feedback regulatory loop required for survival of human breast cancer cells.