Ewing's Sarcoma family tumors (ESFT) are characterized by a translocation t (11: 22) forming an aberrant transcription factor EWS-FLI1. Protein tyrosine phosphatase L1 (PTPL1) was identified as a gene upregulated by EWS-FLI1 in transfected cells by microarray. Our results show that PTPL1 is a transcriptional target of EWS-FLI1 both by chromatin immunoprecipitation and promoter activation studies. We demonstrate that PTPL1 is highly expressed in ESFT cells and patient tumors compared with normal tissues, with a trend towards higher expression in metastatic versus primary tumors. Reduction of PTPL1 protein in ESFT cells correlated with a significant reduction in both monolayer and soft-agar cell growth. In addition, these PTPL1-reduced cells were more sensitive to etoposide-induced apoptosis than the controls. We therefore report a novel transcriptional activation of a phosphatase involved in the oncogenesis of ESFT. Increasing interest in specific phosphatase inhibitors would allow PTPL1 to be evaluated as a therapeutic target in ESFT.