The present study sought to test whether inhibition of phosphotyrosine phosphatases (PTPs) would stimulate proliferation and differentiation of normal bone cells, and whether the PTP inhibitor-mediated effects would be blocked by protein tyrosine kinase (PTK) inhibitors. Three inhibitors [phenylarsine oxide (PAO), orthovanadate (VO<sub>4</sub>), and molybdate (MoO<sub>4</sub>)] and two normal human bone cells with different basal differentiation status (i.e., mandible- and vertebra-derived bone cells) were used. Cell proliferation was determined with [<sup>3</sup>H]thymidine incorporation, and confirmed by cell counting. Bone cell differentiation was assessed by increases in alkaline phosphatase (ALP) specific activity and collagen synthesis. The three test PTP inhibitors each stimulated [<sup>3</sup>H]thymidine incorporation in both human bone cell types in a biphasic, dose-dependent manner with optimal doses of 20 n M PAO, 1 μ M VO<sub>4</sub> and 2 μ M MoO<sub>4</sub>, respectively. These PTP inhibitors at mitogenic doses each significantly and reproducibly increased ALP specific activity and collagen synthesis. To determine whether the stimulatory effects of PTP inhibitors could be blocked by PTK inhibitors, the effects of tyrphostin A51 and erbstatin, two potent PTK inhibitors, on the actions of PTK inhibitors on [<sup>3</sup>H]thymidine incorporation and ALP specific activity were evaluated. Both tyrphostin A51 and erbstatin, which by themselves alone significantly inhibited human bone cell proliferation and increased ALP specific activity, completely abolished the stimulatory effects of each of the three test PTP inhibitors on bone cell proliferation and ALP specific activity. In conclusion, these findings confirm the premise that inhibition of PTP activities in normal human bone cells could lead to increases in cell proliferation and differentiation, effects that are independent of basal differentiation status of the cells. More importantly, this study demonstrates for the first time that the stimulatory actions of the PTP inhibitor on bone cell proliferation and ALP could be blocked by a PTK inhibitor, suggesting that the osteogenic effects of PTP inhibitors may depend on PTK activities, presumably to increase basal tyrosyl phosphorylation level. Accordingly, one should interpret results of studies using PTK inhibitors with caution in that an inhibition by a PTK inhibitor does not necessarily indicate the requirement of PTK activities, as it could also suggest involvement of an inhibition of PTPs.