An insulin granule membrane protein-tyrosine phosphatase (PTP) homologue, phogrin, was cloned by expression screening of a rat insulinoma cDNA library, The 3723-base pair cDNA encoded a transmembrane glycoprotein of 1004 amino acids (M(r) 111876) that underwent post-translational proteolysis to 60-64-kDa products after a 30-min delay. The kinetics of proteolytic conversion (t(1/2) = 45 min) and turnover (t(1/2) = 12 h) were consistent with sorting and conversion in a late compartment of the secretory pathway. Studies on the native beta-cell protein suggested that the COOH-terminal PTP domain was on the cytosolic face of the secretory granule, The lumenal segment was comprised of a pro tease-resistant globular domain of around 25 kDa, Its localization and topology is thus consistent with a transmembrane receptor function related to granule biogenesis, exocytosis, or subsequent membrane recovery, and it should prove to be a useful cell biological marker for the granule membrane. High expression of the mRNA (5.4 kilobases) and protein was evident in islets, pancreatic alpha- and beta-cell tumor lines, brain cells, and other cells of neuroendocrine lineage. It is closely related to the diabetic autoantigen ICA512 (IA-2) (42% identity overall; 80% in the 260-amino acid PTP domain) and thus a potential target of autoimmunity in diabetes mellitus.