Phosphatase of regenerating liver-1 (PRL-1) belongs to a unique subfamily of protein tyrosine phosphatases (PTPases) associated with oncogenic and metastatic phenotypes. While considerable evidence exists to supports a role for PRL-1 in promoting proliferation, the biological regulators and effectors of PRL-1 activity remain unknown. PRL-1 activity is inhibited by disulfide bond formation at the active site in vitro, suggesting PRL-1 may be susceptible to redox regulation in vivo. Because PRL-1 has been observed to localize to several different subcellular locations and cellular redox conditions vary with tissue type, age, stage of cell cycle and subcellular location, we determined the reduction potential of the active site disulfide bond that controls phosphatase activity to better understand the function of PRL-1 in various cellular environments. We used high-resolution solution NMR spectroscopy to measure the potential and found it to be −364.3 ± 1.5 mV. Because normal cellular environments range from −170 to −320 mV, we concluded that nascent PRL-1 would be primarily oxidized inside cells. Our studies show that a significant conformational change accompanies activation, suggesting a post-translational modification may alter the reduction potential, conferring activity. We further demonstrate that alteration of the C-terminus renders the protein reduced and active in vitro, implying the C-terminus is an important regulator of PRL-1 function. These data provide a basis for understanding how subcellular localization regulates the activity of PRL-1 and, with further investigation, may help reveal how PRL-1 promotes unique outcomes in different cellular systems, including proliferation in both normal and diseased states.Phosphatase of Regenerating Liver (PRL) enzymes are a unique subfamily of protein tyrosine phosphatases (PTPases) and play an important role in maintaining appropriate tyrosine phosphorylation levels in the cell during development and tissue regeneration (1). This subfamily includes three homologous members (PRL-1, −2 and −3) that share a high degree of amino acid sequence identity (>75%). PRL-1 (20 kDa) was first discovered in regenerating liver following partial hepatectomy as the product of an early-immediate response gene (2) and has since been implicated in the repair of other tissues including neurons, oligodendrocytes and the cerebral cortex in response to transient forebrain ischemia (3). PRLs are normally expressed at low levels in most mature cells, while higher expression levels are observed during embryonic development (4) and during cellular proliferation (5-9) or differentiation (5,10, † This publication was made possible by NIH grant number P20 RR-17708 from the National Center for Research Resources and the Kansas University Center for Research. This work was additionally supported by fellowships for Andria Skinner from Amgen and the Edith and Eleta Ernst Cancer Research Fellowship. The Q-Tof2tm was purchased with support from KSTAR, Kansas administered NSF EPSCoR and the U...