Signal transduction via tyrosine phosphorylation, normally fine-tuned by the concerted action of both protein tyrosine kinases and protein tyrosine phosphatases (PTPs), is a key mechanism in tumorigenesis. PTP-PEST, a ubiquitously expressed cytoplasmic tyrosine phosphatase, is thought to play an important role in cell adhesion and motility, and may be involved in metastasis. A search for sequence variations within the gene PTPN12 (alias PTP-PEST) was performed in breast cancer cell lines, leading to the identification of three amino acid substitutions at positions 322, 573, and 709. These alterations were also found in squamous cell carcinoma cell lines and could be verified in primary human breast and kidney tumor samples. Analysis of peripheral blood samples confirmed the germline origin of these alterations. Furthermore, functional characterization of the Ile322 and Ala573 PTP-PEST mutants revealed an enhancement of in vitro phosphatase activity, whereas the Lys709 variant showed reduced catalytic activity. These data demonstrate the existence of PTP-PEST variants that might be meaningful for human cancer and underscore the need for further characterizing PTP-PEST and its signaling pathways in context of this disease.