A widely accepted model for regulation of the Lck tyrosine kinase is that it is activated by CD45-mediated dephosphorylation of its COOH-terminal negative regulatory tyrosine (Tyr505). Previous work from our laboratory, however, found that despite hyperphosphorylation of Tyr505, the activity of Lck from CD45- T cell lines was actually increased due to hyperphosphorylation of the positive regulatory tyrosine, residue 394. To avoid potential complications introduced by transformed cells, in this study we have characterized the effect of CD45 on Lck activity in normal cells. Lck in thymocytes from CD45-/- mice was hyperphosphorylated on tyrosine residues. Importantly, and in disagreement with the model that CD45 only activates Lck in vivo, the kinase activity of Lck from cells lacking CD45 was substantially increased. These results support a model in which CD45 dephosphorylates both Tyr505 and Tyr394, the net effect in normal thymocytes being a decrease in enzymatic activity.