There are many misconceptions surrounding the roles of protein phosphatases in the regulation of signal transduction, perhaps the most damaging of which is the erroneous view that these enzymes exert their effects merely as constitutively active housekeeping enzymes. On the contrary, the phosphatases are critical, specific regulators of signalling in their own right and serve an essential function, in a coordinated manner with the kinases, to determine the response to a physiological stimulus. This review is a personal perspective on the development of our understanding of the protein tyrosine phosphatase family of enzymes. I have discussed various aspects of the structure, regulation and function of the protein tyrosine phosphatase family, which I hope will illustrate the fundamental importance of these enzymes in the control of signal transduction.