Protein tyrosine phosphatase (PTP) activity was demonstrated in human endometrium by a histochemical method using phosphotyrosine as substrate. For comparative purposes, non-specific acid phosphatase (AcP) activity was also examined. Protein tyrosine phosphatase activity was very low in proliferative and atrophic endometrium, but its activity was increased 9-fold in glandular epithelium during the secretory phase, and 48-fold in predecidual endometrium, induced by a progestagen-releasing intrauterine device, compared with the proliferative endometrium. Thus, PTP activity appeared to be progesterone-induced. Endometrial PTP appeared to be cellular rather than secretory in origin; its activity was inhibited by vanadate, and its histochemical properties were different from those of lysosomal AcP, but similar to those of prostatic-type AcP. Endometrial PTP may functionally counteract the effects of protein tyrosine kinases (PTKs) associated with growth factor receptors and cellular oncoproteins. Cyclic endometrial proliferation and differentiation are thought to be regulated by the autocrine and paracrine pathways by growth factors such as epidermal growth factor, insulin-like growth factor I and platelet-derived growth factors, and their receptors. However, cessation of proliferation could not be explained by the amounts of these growth factors present or their receptors, in that no constant changes at the interface of the late proliferative and early secretory phases were found. Down-regulation of stimulatory-signalling pathways of PTKs by endometrial PTP induced by progesterone may explain the decrease observed in proliferative activity of glandular cells in cyclic endometrium.