Plays an important role in blood vessel remodeling and angiogenesis. Not necessary for the initial formation of blood vessels, but is essential for their maintenance and remodeling. Can induce dephosphorylation of TEK/TIE2, CDH5/VE-cadherin and KDR/VEGFR-2. Regulates angiopoietin-TIE2 signaling in endothelial cells. Acts as a negative regulator of TIE2, and controls TIE2 driven endothelial cell proliferation, which in turn affects blood vessel remodeling during embryonic development and determines blood vessel size during perinatal growth. Essential for the maintenance of endothelial cell contact integrity and for the adhesive function of VE-cadherin in endothelial cells and this requires the presence of plakoglobin. H2O + O-phospho-L-tyrosyl-[protein] = L-tyrosyl-[protein] + phosphate Monomer (By similarity). Interacts with TEK (PubMed:10557082, PubMed:19451274). Interacts via fibronectin type-III 17 domain with CDH5 (PubMed:19015309). Detected in a complex with CNTN1 and NRCAM (PubMed:11564762). Interacts (phosphorylated form) with FYN and GRB2 (PubMed:20398064). Expression is very high in the vasculature of lung, spleen, and kidney, as well as in the heart valves, and is also present in the endothelium of arterioles and venules. Also expressed in tumor vasculature. Expressed in both arterial and venous vascular endothelium in embryos, although more strongly in arterial vessels. Highly expressed in the developing outflow tract of the heart and later is expressed in developing heart valves. Mice show severe cardiovascular defects and embryonic lethality by 10 dpc. Vasculogenesis occurs normally however, angiogenesis is abnormal. Angiogenic defects are most pronounced in the yolk sac and include a complete failure to elaborate the primitive vascular scaffold into higher-order branched arteries, veins, and capillaries. Belongs to the protein-tyrosine phosphatase family. Receptor class 3 subfamily.