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The protein tyrosine phosphatase CD45 is critical in regulating the earliest steps in T cell receptor signalling but, like all PTPs, is susceptible to oxidative inactivation. Given the widely reported effects of oxidant damage associated with rheumatoid arthritis (RA) we examined whether CD45 phosphatase activity was altered in CD4+ T cells from RA patients and related this to CD4+ T cell function and redox status. CD45 phosphatase specific activity in T cells from RA peripheral blood (PB) and synovial fluid (SF) was 56% and 59% lower than in healthy control (HC) PB respectively. In contrast CD45 activity in T cells from disease controls (DSC) was not significantly different to HC. Reduced glutathione (GSH) (p<0.001) and oxidised glutathione (GSSG) (p<0.05), were both significantly lower in RA PB T cells compared with HC PB T cells. Treatment of RA PB T cells with the glutathione precursor N-acetyl cysteine increased CD45 phosphatase activity and proliferation, while decreasing Lck kinase phosphorylation which is regulated by CD45. Our observations lead to the hypothesis that the largely reversible oxidative inactivation of the CD45 phosphatase may underlie the decreased signalling efficiency and functional responsiveness characteristic of RA PB CD4+ T cells.