Protein tyrosine phosphatases (PTPs) catalyze the dephosphorylation of tyrosine residues, a process that involves a conserved tryptophan-proline-aspartate (WPD) loop in catalysis. In previously determined structures of PTPs, the WPD-loop has been observed in either an "open" conformation or a "closed" conformation. In the current work, X-ray structures of the catalytic domain of receptor-like protein tyrosine phosphatase γ (RPTPγ) revealed a ligand-induced "superopen" conformation not previously reported for PTPs. In the superopen conformation, the ligand acts as an apparent competitive inhibitor and binds in a small hydrophobic pocket adjacent to, but distinct from, the active site. In the open and closed WPD-loop conformations of RPTPγ, the side chain of Trp1026 partially occupies this pocket. In the superopen conformation, Trp1026 is displaced allowing a 3,4-dichlorobenzyl substituent to occupy this site. The bound ligand prevents closure of the WPD-loop over the active site and disrupts the catalytic cycle of the enzyme.