Signaling events leading to B cell growth or apoptosis are beginning to be unravelled, but detailed information is still lacking. To identify signaling molecules involved in B cell antigen receptor (BCR)-initiated pathways, we used the immature B cell line, WEHI-231, to investigate protein tyrosine phosphatases (PTP) whose expression was modulated by BCR ligation. Among the PTP cloned by reverse transcription-PCR, mRNA expression of the proline-, glutamic acid-, serine- and threonine-rich (PEST) domain phosphatase (PEP) was selectively elevated 3.1-fold within 3 h after anti-IgM antibody stimulation. In contrast, expression of another PEST domain phosphatase, PTP-PEST, was unaffected. Western blot analysis revealed that 71 % of PEP was located in the cytosolic fraction, while 29 % was in the membrane fraction. To examine the direct contribution made by PEP to BCR-initiated signal transduction, we transfected an antisense PEP cDNA into WEHI-231 cells. Two stable clones were established in which PEP expression was reduced by 34 % and 47 %, respectively. Strikingly, BCR-mediated inhibition of DNA synthesis was significantly rescued in the clones, and G1 phase cell cycle arrest acid apoptosis were almost completely ablated. Considered collectively,these results indicate that PEP is a positive, crucial regulator in determining B cell fate triggered by BCR engagement.