The protein tyrosine phosphatase Pez is a major phosphatase of adherens junctions and dephosphorylates beta-catenin.

Cell-cell adhesion regulates processes important in embryonal development, normal physiology, and cancer progression. It is regulated by various mechanisms including tyrosine phosphorylation. We have previously shown that the protein tyrosine phosphatase Pez is concentrated at intercellular junctions in confluent, quiescent monolayers but is nuclear in cells lacking cell-cell contacts. We show here with an epithelial cell model that Pez localizes to the adherens junctions in confluent monolayers. A truncation mutant lacking the catalytic domain acts as a dominant negative mutant to upregulate tyrosine phosphorylation at adherens junctions. We identified beta-catenin, a component of adherens junctions, as a substrate of Pez by a "substrate trapping" approach and by in vitro dephosphorylation with recombinant Pez. Consistent with this, ectopic expression of the dominant negative mutant caused an increase in tyrosine phosphorylation of beta-catenin, demonstrating that Pez regulates the level of tyrosine phosphorylation of adherens junction proteins, including beta-catenin. Increased tyrosine phosphorylation of adherens junction proteins has been shown to decrease cell-cell adhesion, promoting cell migration as a result. Accordingly, the dominant negative Pez mutant enhanced cell motility in an in vitro "wound" assay. This suggests that Pez is also a regulator of cell motility, most likely through its action on cell-cell adhesion.