1,2-Naphthoquinone (1,2-NQ), an atmospheric contaminant, causes the contraction of guinea pig trachea through the activation of epidermal growth factor receptor (EGFR) by inhibiting protein-tyrosine phosphatases (PTPs). Phosphorylation of EGFR is negatively regulated by PTPs, but details of the mechanism by which 1,2-NQ inhibits PTPs have not been elucidated. Results described in this report demonstrate that 1,2-NQ forms covalent bonds with PTP1B after exposure to human epithelial A431 cells. In this study, a concentration-dependent phosphorylation of EGFR was found to be coupled to the reduction of PTP activity in the cells. The reduction in PTP activity was due to the irreversible modification of PTP1B, and when PTP1B was overexpressed by the cells, the 1,2-NQ-mediated EGFR phosphorylation was suppressed. Studies with purified PTP1B and 1,2-NQ showed that the reduction in enzyme activity was due to a nucleophilic attack by the quinone on the enzyme, to form covalent bonds. Matrix-assisted laser desorption and ionization time-of-flight mass spectrometry analysis and mutation experiments revealed that PTP1B inactivation was primarily due to covalent attachment of the quinone to Cys-121 of the enzyme, with binding to His-25 and Cys-215 as well. Collectively, the results show that covalent attachment of 1,2-NQ to PTP1B is at least partially responsible for the reduction of PTP activity, which leads to prolonged transactivation of EGFR in the cells.