Erythropoietin (Epo), the primary in vivo stimulator of erythroid proliferation and differentiation, acts, in part, by altering the tyrosine phosphorylation levels of various intracellular signaling molecules. These phosphorylation levels are tightly regulated by both tyrosine kinases and tyrosine phosphatases. We have recently shown that the SH2 containing tyrosine phosphatase, Syp, binds directly to both the tyrosine phosphorylated form of the Epo receptor (EpoR) and to Grb2 after Epo stimulation of M07e cells engineered to express high levels of human EpoRs (T. Tauchi, et al: J Biol Chem 270:5631, 1995). To determine which tyrosine within the EpoR is responsible for binding Syp, we examined DA-3 cell lines expressing full-length mutant EpoRs bearing tyrosine to phenylalanine substitutions for each of the eight tyrosines within the intracellular domain of the EpoR. We found that: (1) all Epo-stimulated mutant EpoRs, except for the Y425F EpoR, coimmunoprecipitated with Syp; (2) all Epo-stimulated mutant EpoRs, except for the Y425F EpoR, bound to a GST-fusion protein containing both SH2 domains of Syp; (3) Jak2 could phosphorylate GST-Syp in vitro after Epo stimulation of wild-type (wt) EpoR expressing DA-3 cells; (4) Epo-stimulated tyrosine phosphorylation of Syp in vivo was markedly reduced in Y425F EpoR expressing DA-3 calls; and (5) DA-3 cells expressing the Y425F EpoR grow less well in response to Epo than wt EpoR expressing cells. These results suggest that Syp binds via its SH2 domains to phosphorylated Y425 within the EpoR and is then phosphorylated on tyrosine residues by Jak2. Moreover, Y425 in the EpoR reduces the Epo requirement for Syp tyrosine phosphorylation and promotes proliferation.