Phosphatase which may dephosphorylate receptor let-23 and thereby regulate cell fate during the development of the vulva and the excretory system (PubMed:15901674). By inhibiting let-23 signaling prevents the establishment of a primary cell fate in the descendants of vulva precursor cells P5.p and P7.p (PubMed:15901674). Similarly, may prevent duct cell fate in ABpr precursor (PubMed:15901674). Also dephosphorylates the beta-integrin subunit pat-3, probably within the alpha pat-2/beta pat-3 integrin receptor complex, which leads to down-stream effects including the negative regulation of let-23 signaling and vulval induction (PubMed:28135265). In particular, by dephosphorylating pat-3, promotes the recruitment (by unphosphorylated pat-3) of the cytoplasmic adapter protein tln-1 to the plasma membrane of secondary vulval precursor cells (PubMed:28135265). This promotes the linking of focal adhesion sites to the F-actin cytoskeleton, and also acts to restrict the mobility of the let-23 receptor on the plasma membrane of vulval cells thereby attenuating let-23 signaling (PubMed:28135265). H2O + O-phospho-L-tyrosyl-[protein] = L-tyrosyl-[protein] + phosphate Interacts with pat-2. Localizes in intracellular punctate structures in vulva cell precursors which partially colocalize with let-23. Initially expressed in vulva precursor cells P5.p, P6.p and P7.p. Expression is later restricted to P5.px and P7.px and their descendants P5.pxx and P7.pxx with higher levels in the cells proximal to P6.p descendants. RNAi-mediated knockdown in a lip-1 zh15 mutant background causes the descendants of P5.p and/or P7.p vulva precursor cells to adopt a mixed primary and secondary cell fate. Multivulva formation in 19 percent of animals. RNAi-mediated knockdown in a let-23 sy-1 mutant background partially restores vulva induction. Belongs to the protein-tyrosine phosphatase family. Receptor class 3 subfamily.