Integrin-mediated cell adhesion regulates a multitude of cellular responses, including proliferation, survival and cross-talk between different cellular signalling pathways. So far, integrins have been mainly shown to convey permissive signals enabling anchorage-dependent receptor tyrosine kinase signalling. Here we show that a collagen-binding integrin alpha(1)beta(1) functions as a negative regulator of epidermal growth factor receptor (EGFR) signalling through the activation of a protein tyrosine phosphatase. The cytoplasmic tail of alpha(1) integrin selectively interacts with a ubiquitously expressed protein tyrosine phosphatase TCPTP (T-cell protein tyrosine phosphatase) and activates it after cell adhesion to collagen. The activation results in reduced EGFR phosphorylation after EGF stimulation. Introduction of the alpha(1) cytoplasmic domain peptide into cells induces phosphatase activation and inhibits EGF-induced cell proliferation and anchorage-independent growth of malignant cells. These data are the first demonstration of the regulation of TCPTP activity in vivo and represent a new molecular paradigm of integrin-mediated negative regulation of receptor tyrosine kinase signalling.