Cellular growth, differentiation and migration is regulated by protein tyrosine phosphorylation. Receptor-like protein tyrosine phosphatases are thus likely to be key regulators of vital cellular processes. The regulation of these enzymes is in general poorly understood. Ligands have been identified only for a small subset of the receptor-like protein tyrosine phosphatases and in no case has upregulation of the specific activity by extracellular ligands been demonstrated. Prompted by earlier findings of ligands for receptor-like protein tyrosine phosphatases in extracellular matrix we investigated if Matrigel, a preparation of extracellular matrix proteins, contained modulators of the specific activity of the receptor-like protein tyrosine phosphatase DEP-1. Matrigel stimulation of cells increased the specific activity of immunoprecipitated DEP-1. Also, incubation of immunoprecipitated DEP-1 with Matrigel led to an increase in DEP-1 activity, which was blocked by soluble DEP-1 extracellular domain. Finally, immunoprecipitated DeltaECD-DEP-1, a mutant form of DEP-1 lacking most of the extracellular domain, failed to respond to Matrigel stimulation. These experiments identify Matrigel as a source of DEP-1 agonist(s) and provide the first evidence for upregulation of the specific activity of receptor-like protein tyrosine phosphatases by extracellular ligands.