MCA-EDAEpYAAK(DNP)R-NH2 is a sensitive fluorescence resonance energy transfer (FRET) substrate for assaying protein tyrosine phosphatases (PTPs). In the peptide, the fluorescent MCA group is quenched efficiently by the DNP group. The sequence of this peptide is similar to that around the phosphotyrosine residue in pp60src, the Rous sarcoma virus-transforming protein. Although the fluorescence intensity of the substrate is practically unchanged upon PTP-catalysed dephosphorylation, it increases approximately 120-fold upon subsequent treatment with chymotrypsin. It is proven that chymotrypsin cleaves only the dephosphorylated substrate at the Tyr-Ala bond. Thus with the aid of chymotrypsin, dephosphorylation of the substrate can be measured fluorometrically. A strictly linear correlation was observed between PTP concentration and dephosphorylation rate. The fluorogenic substrate is dephosphorylated by some PTPs much more rapidly than the corresponding 32P-labelled substrate used for comparison, whereas alkaline phosphatase dephosphorylates the two substrates at similar rates. The fluorogenic substrate is therefore more specific for PTPs than the radiolabelled substrate. The assay has detection limit of 0.2-0.4 pmol, whereas it is estimated to be about 1 pmol in the assay that used 32P-labelled peptide. The assay with the fluorogenic substrate could be applied to the estimation of kinetic parameters and measurement of PTP activity in crude-enzyme preparations. Abs/Em=328/395 nm.