Abstract A role for the receptor protein tyrosine phosphatase α (PTPα) in immune cell function and regulation of Src family kinases was investigated using thymocytes from PTPα-deficient mice. PTPα-null thymocytes develop normally, but unstimulated PTPα−/− cells exhibit increased tyrosine phosphorylation of specific proteins, increased Fyn activity, and hyperphosphorylation of Cbp/PAG that promotes its association with C-terminal Src kinase. Elevated Fyn activity in the absence of PTPα is due to enhanced phosphorylation of Fyn tyrosines 528 and 417. Some PTPα is localized in lipid rafts of thymocytes, and raft-associated Fyn is specifically activated in PTPα−/− cells. PTPα is not a Cbp/PAG phosphatase, because it is not required for Cbp/PAG dephosphorylation in unstimulated or anti-CD3-stimulated thymocytes. Together, our results indicate that PTPα, likely located in lipid rafts, regulates the activity of raft Fyn. In the absence of PTPα this population of Fyn is activated and phosphorylates Cbp/PAG to enhance association with C-terminal Src kinase. Although TCR-mediated tyrosine phosphorylation was apparently unaffected by the absence of PTPα, the long-term proliferative response of PTPα−/− thymocytes was reduced. These findings indicate that PTPα is a component of the complex Src family tyrosine kinase regulatory network in thymocytes and is required to suppress Fyn activity in unstimulated cells in a manner that is not compensated for by the major T cell PTP and SFK regulator, CD45.