Neu-mediated phosphorylation of protein tyrosine phosphatase epsilon is critical for activation of Src in mammary tumor cells.

The receptor-type protein tyrosine phosphatase epsilon (RPTPepsilon) activates c-Src in mammary tumor cells induced in vivo by Neu. Tumor cells lacking RPTPepsilon exhibit reduced c-Src activity, appear less transformed morphologically and proliferate slower in vitro and in vivo. Expression of Src rescues most of these phenotypes, indicating that c-Src activity is important for maintaining the transformed phenotype. However, the molecular mechanisms that control activation of c-Src by RPTPepsilon are unknown. We show that Neu induces phosphorylation of RPTPepsilon exclusively at its C-terminal Y695, and that this phosphorylation is required for activation of c-Src by RPTPepsilon. Phosphorylation of RPTPepsilon does not affect its activity toward another substrate, the voltage-gated potassium channel Kv2.1, suggesting that phosphorylation directs RPTPepsilon activity toward c-Src. Phosphorylation of RPTPepsilon reduces its dimerization at the cell membrane, although this does not affect its activity significantly. RPTPepsilon is subject to strong auto- and trans-dephosphorylation, suggesting that dephosphorylation limits the activation of c-Src downstream of Neu. We conclude that an Neu-RPTPepsilon-Src signaling pathway exists in mammary tumor cells, in which phosphorylation of RPTPepsilon by Neu directs RPTPepsilon to activate c-Src. Reversible phosphorylation of RPTPepsilon at Y695 may thus function as a 'molecular switch', which affects the substrate specificity of the phosphatase.