Cadherins are calcium-dependent cell adhesion molecules that play fundamental roles in embryonic development, tissue morphogenesis, and cancer. A prerequisite for their function is association with the actin cytoskeleton via the catenins. Tyrosine phosphorylation of beta-catenin, which correlates with a reduction in cadherin-dependent cell adhesion, may provide cells with a mechanism to regulate cadherin activity. Here we report that beta-catenin immune precipitates from PC12 cells contain tyrosine phosphatase activity which dephosphorylates beta-catenin in vitro. In addition, we show that a member of the leukocyte antigen-related protein (LAR)-related transmembrane tyrosine phosphatase family (LAR-PTP) associates with the cadherin-catenin complex. This association required the amino-terminal domain of beta-catenin but does not require the armadillo repeats, which mediate association with cadherins. The interaction also is detected in PC9 cells, which lack alpha-catenin. Thus, the association is not mediated by alpha-catenin or by cadherins. Interestingly, LAR-PTPs are phosphorylated on tyrosine in a TrkA-dependent manner, and their association with the cadherin-catenin complex is reduced in cells treated with NGF. We propose that changes in tyrosine phosphorylation of beta-catenin mediated by TrkA and LAR-PTPs control cadherin adhesive function during processes such as neurite outgrowth.