Protein tyrosine phosphatases (PTPs) are important targets of the H₂O₂ that is produced during mammalian signal transduction. H₂O₂-mediated inactivation of PTPs also may be important in various pathophysiological conditions involving oxidative stress. Here we review the chemical and structural biology of redox-regulated PTPs. Reactions of H₂O₂ with PTPs convert the catalytic cysteine thiol to a sulfenic acid. In PTPs, the initially generated sulfenic acid residues have the potential to undergo secondary reactions with a neighboring amide nitrogen or cysteine thiol residue to yield a sulfenyl amide or disulfide, respectively. The chemical mechanisms by which formation of sulfenyl amide and disulfide linkages can protect the catalytic cysteine residue against irreversible overoxidation to sulfinic and sulfonic oxidation states are described. Due to the propensity for back-door and distal cysteine residues to engage with the active-site cysteine after oxidative inactivation, differences in the structures of the oxidatively inactivated PTPs may stem, to a large degree, from differences in the number and location of cysteine residues surrounding the active site of the enzymes. PTPs with key cysteine residues in structurally similar locations may be expected to share similar mechanisms of oxidative inactivation. Antioxid. Redox Signal. 15, 77–97.