Foveal cone photoreceptors are morphologically distinct and, presumably, express unique transcripts. We have identified a cDNA clone encoding the protein tyrosine phosphatase (PTP), phosphatase of regenerating liver 1 (PRL-1) in a screen for genes that are enriched in monkey fovea. PRL-1 was originally isolated as an immediate early gene in regenerating liver [R.H. Diamond, D.E. Cressman, T.M. Laz, C.S. Abrams, R. Taub, PRL-1, a unique nuclear protein tyrosine phosphatase, affects cell growth, Mol. Cell Biol. 14 (1994) 3752-3762]. On cDNA Southern blots of human and monkey retina, radiolabeled PRL-1 cDNA hybridized to a single mRNA species of about 2.5 kb that was most intense in fovea-enriched samples. The monkey PRL-1 deduced amino acid sequence is identical to human, rat and mouse PRL-1. Affinity-purified antibodies directed against PRL-1 preferentially labeled cone photoreceptor cells and a subpopulation of bipolar cells in monkey retina. Immunoreactivity in cones was confined to red and green, but not to blue, cones and was restricted to the outer segments. Immunolocalization also revealed that PRL-1 protein expression was non-nuclear, suggesting that its function in the retina may be unrelated to its role in other tissues where it is expressed primarily in nuclei. Although both foveal and extrafoveal cones were PRL-1 reactive, the high abundance of PRL-1 mRNAs detected in monkey fovea correlates with the high concentration of cones in the fovea. The PRL-1 gene is located on chromosome 6q within an interval that also contains the genes that cause two hereditary retinal dystrophies. These studies demonstrate novel expression of the PRL-1 gene in the neural retina and suggest the phosphatase activity of PRL-1 may modulate normal cone photoreceptor cell function.