The tumor suppressor INPP4B is an important regulator of phosphatidyl-inositol signaling in the cell. Reduced INPP4B expression is associated with poor outcomes for breast, prostate, and ovarian cancer patients. INPP4B contains a CX5R catalytic motif characteristic of dual-specificity phosphatases, such as PTEN. Lipid phosphatase activity of INPP4B has previously been described. In this report we show that INPP4B can dephosphorylate para-nitrophenyl phosphate (pNPP) and 6,8-difluoro-4-methylumbelliferyl (DiFMUP), synthetic phosphotyrosine analogs, suggesting that INPP4B has protein tyrosine phosphatase (PTP) activity. Using mutagenesis, we examined the functional role of specific amino acids within the INPP4B C(842)KSAKDR catalytic site. The K843M mutant displayed increased pNPP hydrolysis, the K846M mutant lost lipid phosphatase activity with no effect on PTP activity, and the D847E substitution ablated PTP activity and significantly reduced lipid phosphatase activity. Further, we show that INPP4B but not PTEN is able to reduce tyrosine phosphorylation of Akt1 and both the lipid and PTP activity of INPP4B likely contribute to the reduction of Akt1 phosphorylation. Taken together our data identified key residues in the INPP4B catalytic domain associated with lipid and protein phosphatase activities and found a robust downstream target regulated by INPP4B but not PTEN. (C) 2013 Elsevier Inc. All rights reserved.