A protein of 66 kd immunoreactive to anti-tyrosine phosphatase (PTP1C) antibodies coeluted with, and so may be associated with, somatostatin receptors (ssts) from rat pancreatic membranes. Also, anti-PTP1C antibodies immunoprecipitated functional ssts from pancreatic membranes, suggesting a PTP1C protein can associate with ssts at the membrane level. Somatostatin analog RC 160 had good affinity for sst 2,3 and sst 5 (IC 50 = 0.2, 0.1, and 21 nmol/L) and low affinity for sst 1 and sst 4 (IC 50 = 200 and 620 nmol/L), and induced rapid dose-dependent stimulation of PTP activity (maximal at 1 nmol/L and half maximal at 5 pmol/L) in NIH3T3 and CHO cells expressing sst 2, with similar results for sst 1, but no stimulation with sst 3,4 or sst 5. Treatment of cells expressing sst 2 with RC 160 for 24 hours inhibited serum- or growth factor-induced cell proliferation dose-dependently (maximal at 1 nmol/L, half maximal at 6 to 53 pmol/L RC 160). In cells expressing sst 1, weak inhibition of fibroblast growth factor 2-induced NIH3T3 cell proliferation was provoked by somatostatin analogs (> 10 nmol/L). The good correlation between inhibition of somatostatin binding, stimulation of PTP activity, and inhibition of cell proliferation implicates a PTP in growth inhibition mediated by sst 2 and sst 1.