Two continuous assays for protein tyrosine phosphatases (PTPases) have been developed using phosphotyrosine containing peptide substrates. These assays are based on the marked differences in the spectra of the peptide before and after the removal of the phosphate group. The increase in the absorbance at 282 nm or the fluorescence at 305 nm of the peptide upon the action of PTPase can be followed continuously and the resulting progress curve (time course) can be analyzed directly using the integrated form of the Michaelis-Menten equation. The procedure is convenient and efficient, since both kcat and Km values can be obtained in a single run. The difference absorption coefficient (delta epsilon) at 282 nm is relatively insensitive to the pH of the reaction media. These techniques were applied to two homogeneous recombinant PTPases employing six phosphotyrosine-containing peptides. Km and kcat values obtained from the progress curve analysis were similar to those determined by the traditional initial rate inorganic phosphate assay. The peptides corresponding to autophosphorylation sites in Neu, p56lck, and p60src proteins show distinct behavior with the Yersinia PTPase, Yop51*, and the mammalian PTPase (PTP1U323). In both cases, the kcat values were relatively constant for all the peptides tested whereas the Km values were very sensitive to the amino acid sequence surrounding the tyrosine residue, especially in the case of Yop51*. Thus, both Yop51* and PTP1U323 show differential recognition of the phosphotyrosyl residues in the context of distinct primary structure of peptide substrates.