Cross-linking B cell antigen receptor (BCR) elicits early signal transduction events, including activation of protein tyrosine kinases, phosphorylation of receptor components, activation of phospholipase C-γ (PLC-γ), and increases in intracellular free Ca. In this article, we report that cross-linking the BCR led to a rapid translocation of cytosolic protein tyrosine phosphatase (PTP) 1C to the particulate fraction, where it became associated with a 140-150-kD tyrosyl-phosphorylated protein. Western blotting analysis identified this 140-150-kD protein to be CD22. The association of PTP-1C with CD22 was mediated by the NH2-terminal Srchomology 2 (SH2) domain of PTP-1C. Complexes of either CD22/PTP-1C/Syk or CD22/PTP-1C/Syk/PLC-γ1 could be isolated from B cells stimulated by BCR engagement or a mixture of hydrogen peroxide and sodium orthovanadate, respectively. The binding of PLC-γ1 and Syk to tyrosyl-phosphorylated CD22 was mediated by the NH2-terminal SH2 domain of PLC-γ1 and the COOH-terminal SH2 domain of Syk, respectively. These observations suggest that tyrosyl-phosphorylated CD22 may provide the scaffolding to ensure efficient interaction between Syk and PLC-γ1 and the activation of PLC-γ1 by Syk. The recruitment of PTP-1C to BCR-associated CD22 may downmodulate the activity of this complex by dephosphorylation of CD22, Syk, and/or PLC-γ1. Transient expression of CD22 and a null mutant of PTP-1C (PTP-1C) in COS cells resulted in an increase in tyrosyl phosphorylation of CD22 and its interaction with PTP-1C. By contrast, CD22 was not tyrosyl phosphorylated or associated with PTP-1C in the presence of wild-type PTP-1C. These results suggest that tyrosyl-phosphorylated CD22 may be a substrate for PTP-1C or that PTP-1C regulates tyrosyl phosphorylation of CD22.