The reaction mechanisms of p-nitrophenyl phosphate hydrolysis catalyzed by two rat liver isoenzymes of the low M(r) phosphotyrosine protein phosphatase (AcP1 and AcP2) were compared. Furthermore, the effect of some heterocyclic compounds on their activities were tested. Cyclic GMP and guanosine causes a particularly high activation of the isoenzyme AcP2, whereas its effect on AcP1 is very poor. A study on the mechanism of cyclic GMP activation was carried out. The results suggest that cyclic GMP activates the AcP2 isoenzyme by increasing the rate of the step that leads to the hydrolysis of the covalent enzyme-substrate phosphorylated complex formed during the catalytic process. The physiological significance of cyclic GMP activation of only one of the two isoenzymes (AcP2) remains uncertain.