Intracellular signaling by protein tyrosine phosphorylation is generally understood to govern many aspects of cellular behavior. The biological consequences of this signaling pathway are important because the levels of protein tyrosine phosphorylation are frequently elevated in cancer cells. In the classic paradigm, tyrosine kinases promote tumor cell growth, survival, and invasiveness, whereas tyrosine phosphatases negatively regulate these same behaviors. Here, we identify one particular tyrosine phosphatase, low molecular weight tyrosine phosphatase (LMW-PTP), which is frequently overexpressed in transformed cells. We also show that overexpression of LMW-PTP is sufficient to confer transformation upon non-transformed epithelial cells. Notably, we show that the EphA2 receptor tyrosine kinase is a prominent substrate for LMW-PTP and that the oncogenic activities of LMW-PTP result from altered EphA2 expression and function. These results suggest a role for LMW-PTP in transformation progression and link its oncogenic potential to EphA2.