The synthesis of natural product, dephostatin, is described. Both dephostatin and N-methyl-Nnitrosoaniline are found to inactivate the homogeneous recombinant Yersinia and mammalian protein tyrosine phosphatases in a concentration and time dependent manner. The tyrosine phosphorylation on target protein is tightly controlled by the concerted actions of both protein tyrosine kinases and protein tyrosine phosphatases (PTP; EC 2.7.1.112). While much information exists regarding protein tyrosine kinase inhibitors, there has been little progress in the identification and design of PTP inhibitors. Dephostatin 1, a PTP inhibitor, was recently isolated from the culture broth of streptomyces sp. We have been investigating the mechanism of the inhibition by dephostatin since it contains a unique N-nitrosamine functionality. Here we report the synthesis and bioassay of 1 and its unsubstituted precursor, N-methyl-Nnitrosoaniline 2.