CD45, a transmembrane protein tyrosine phosphatase (PTPase), is required for TCR signaling. Multiple CD45 isoforms, differing in the extracellular domain, are expressed in a tissue- and activation-specific manner, suggesting an important function for this domain. We report that a chimeric protein in which the extracellular and transmembrane domains of CD45 are replaced with those of the EGF receptor (EGFR) is able to restore TCR signaling in a CD45-deficient cell. Thus, the cytoplasmic domain of CD45 is necessary and sufficient for TCR signal transduction. Moreover, EGFR ligands functionally inactivate the EGFR-CD45 chimera in a manner that is dependent on dimerization of the chimeric protein. Inactivation of EGFR-CD45 chimera function results in the loss of TCR signaling, indicating that CD45 function is continuously required for TCR-mediated proximal signaling events. These results suggest that ligand-mediated regulation of receptor-PTPases may have mechanistic similarities with receptor tyrosine kinases.