The Hic-5 protein is encoded by a transforming growth factor-beta1- and hydrogen peroxide-inducible gene, hic-5, and has striking similarity to paxillin, especially in their C-terminal LIM domains. Like paxillin, Hic-5 is localized in focal adhesion plaques in association with focal adhesion kinase in cultured fibroblasts. We carried out yeast two-hybrid screening to identify cellular factors that form a complex with Hic-5 using its LIM domains as a bait, and we identified a cytoplasmic tyrosine phosphatase (PTP-PEST) as one of the partners of Hic-5. These two proteins are associated in mammalian cells. From in vitro binding experiments using deletion and point mutations, it was demonstrated that the essential domain in Hic-5 for the binding was LIM 3. As for PTP-PEST, one of the five proline-rich sequences found on PTP-PEST, Pro-2, was identified as the binding site for Hic-5 in in vitro binding assays. Paxillin also binds to the Pro-2 domain of PTP-PEST. In conclusion, Hic-5 may participate in the regulation of signaling cascade through its interaction with distinct tyrosine kinases and phosphatases.