The specificity of cytosolic protein phosphotyrosine (PPT) phosphatases was investigated using different peptides and proteins that were phosphorylated on tyrosine residues by the EGF receptor kinase. The acidic phosphoproteins, serum albumin, casein, and myosin light chains, were dephosphorylated by the PPT phosphatases with apparent Km values of 1.2 to 12.5 microM and apparent velocities of 0.2 to 18 mumol/min/mg. In contrast, [Tyr(32P)]histone and the phosphotyrosine peptides [Val5]angiotensin and RR-src, a peptide with sequence Arg-Arg-Leu-Ile-Glu-Asp-Ala-Glu-Tyr-Ala-Ala-Arg-Gly, were unreactive with the PPT phosphatases. However, each of these unreactive phosphopolypeptides was dephosphorylated under the same conditions by calf-intestine alkaline phosphatase. The data reveal how PPT phosphatase activity has been ascribed to different cellular enzymes. When acidic phosphotyrosine proteins were used as substrates in assays for PPT phosphatase activity the cytosolic enzymes were isolated, whereas when phosphotyrosine histones were used as substrates only the membrane-bound alkaline phosphatase was detected. Apparently the protein tyrosine kinase and the protein tyrosine phosphatases do not have the same specificity, so substrates such as histone, angiotensin, or RR-src are phosphorylated but not hydrolyzed. Therefore, these polypeptides would be ideal for the characterization of protein tyrosine kinases in cellular extracts.