PTP-BAS is a membrane-associated protein tyrosine phosphatase containing a band-4.1 homology region and five PDZ (PSD-95 Dlg ZO-1) [discs-large homology region (‘DHR’)/Gly-Leu-Gly-Phe (‘GLGF’)] domains. The second and fourth PDZ domains were reported to associate with Fas/CD95. By using the first PDZ domain as a bait in yeast two-hybrid screening, we have identified IκBα as a binding protein. IκBα associated with PDZ1 through the stretch of the N-terminal three ankyrin repeats. The association was also confirmed in HeLa cells by co-immunoprecipitation experiments. Inhibition of PTP-BAS by expression of dominant-negative PTP-BAS mutant resulted in tyrosine-phosphorylation of IκBα. Tyrosine-phosphorylation of IκBα is a key event in activation of nuclear factor (NF)-κB during reoxygenation. PTP-BAS may thus play a regulatory role in activation of NF-κB under high oxidative stress.