PTP-PEST (encoded by Ptpn12) is an intracellular protein tyrosine phosphatase belonging to the same family as LYP. LYP inhibits secondary T cell responses by suppressing Src family protein tyrosine kinases and is implicated in human autoimmunity. To determine the function of PTP-PEST in T cells, we generated mice with a conditionally deleted allele of Ptpn12. By removing PTP-PEST in T cells, we determined that PTP-PEST was not necessary for T cell development or primary responses. However, PTP-PEST was required for secondary T cell responses, anergy prevention, and autoimmunity induction. PTP-PEST specifically regulated the phosphorylation of Pyk2, a substrate of the Src family kinase Fyn. It also promoted the formation of T cell homoaggregates, which are known to enhance T cell activation. Thus, PTP-PEST controls Pyk2 activity and is a positive regulator of secondary T cell activation. These data illustrate the critical role of protein tyrosine phosphatases in T cell regulation.