SHP-1 is a cytosolic tyrosine phosphatase implicated in down-regulation of B cell antigen receptor signaling. SHP-1 effects on the antigen receptor reflect its capacity to dephosphorylate this receptor as well as several inhibitory comodulators. In view of our observation that antigen receptor-induced CD19 tyrosine phosphorylation is constitutively increased in B cells from SHP-l-deficient motheaten mice, we investigated the possibility that CD19, a positive modulator of antigen receptor signaling, represents another substrate for SHP-1. However, analysis of CD19 coimmunoprecipitable tyrosine phosphatase activity in CD19 immunoprecipitates from SHP-1-deficient and wild-type B cells revealed that SHP-1 accounts for only a minor portion of CD19-associated tyrosine phosphatase activity. As CD19 tyrosine phosphorylation is modulated by the Lyn protein-tyrosine kinase, Lyn activity was evaluated in wild-type and motheaten B cells. The results revealed both Lyn as well as CD19-associated Lyn kinase activity to be constitutively and inducibly increased in SHP-1-deficient compared with wild-type B cells. The data also demonstrated SHP-1 to be associated with Lyn in stimulated but not in resting B cells and indicated this interaction to be mediated via Lyn binding to the SHP-1 N-terminal SH2 domain. These findings, together with cyanogen bromide cleavage data revealing that SHP-1 dephosphorylates the Lyn autophosphorylation site, identify Lyn deactivation/dephosphorylation as a likely mechanism whereby SHP-1 exerts its influence on CD19 tyrosine phosphorylation and, by extension, its inhibitory effect on B cell antigen receptor signaling.