The kinetic mechanism of the hydrolysis of phosphate monoesters catalyzed by a soluble form of rat protein-tyrosine phosphatase (PTPase), PTP1, was probed with a variety of steady-state and pre-steady-state kinetic techniques. Product inhibition and 18O exchange experiments are consistent with the enzymatic reaction proceeding through two chemical steps, i.e. formation and breakdown of a covalent phosphoenzyme intermediate. The variation of kcat/Km with pH indicates that three ionizable groups are involved in enzyme substrate binding and catalysis. The first group must be deprotonated and is attributed to the second ionization of the substrate. The other two groups with pK alpha values of 5.1 and 5.5 correspond to two enzyme active site residues. The kcat-pH profiles for both p-nitrophenyl phosphate and beta-naphthyl phosphate are bell-shaped and are superimposable, with the apparent pK alpha values derived from the acidic limb and the basic limb of the profile being 4.4 and 6.8, respectively. This suggests that the rate-limiting step corresponds to the decomposition of the phosphoenzyme intermediate at all pH values. Results from leaving group dependence of kcat at two different pH values support the above conclusion. Furthermore, burst kinetics have been demonstrated with PTP1 using p-nitrophenyl phosphate as a substrate. The rate constants for the formation and the breakdown of the intermediate are 241 and 12 s-1, respectively, at pH 6.0 and 3.5 degrees C. A normal D2O solvent isotope effect (kcatH/kcatD = 1.5) is associated with the breakdown of the phosphoenzyme intermediate, indicating a solvent-derived proton in the transition state. The leaving group dependence of kcat/Km suggests that there is a strong electrophilic interaction between the enzyme and the leaving group oxygen in the transition state of the phosphorylation event. These results are compared with those of the Yersinia PTPase and suggest that the mechanism for PTPase-catalyzed phosphate monoester hydrolysis is conserved from bacterial to mammals.