PTPmu, an Ig superfamily receptor protein-tyrosine phosphatase, promotes cell-cell adhesion and interacts with the cadherin-catenin complex. The signaling pathway downstream of PTPmu is unknown; therefore, we used a yeast two-hybrid screen to identify additional PTPmu interacting proteins. The membrane-proximal catalytic domain of PTPmu was used as bait. Sequencing of two positive clones identified the scaffolding protein RACK1 (receptor for activated protein C kinase) as a PTPmu interacting protein. We demonstrate that RACK1 interacts with PTPmu when co-expressed in a recombinant baculovirus expression system. RACK1 is known to bind to the src protein-tyrosine kinase. This study demonstrates that PTPmu association with RACK1 is disrupted by the presence of constituitively active src. RACK1 is thought to be a scaffolding protein that recruits proteins to the plasma membrane via an unknown mechanism. We have shown that the association of endogenous PTPmu and RACK1 in a lung cell line is increased at high cell density. We also demonstrate that the recruitment of RACK1 to both the plasma membrane and cell-cell contact sites is dependent upon the presence of the PTP mu protein in these cells. Therefore, PTPmu may be one of the proteins that recruits RACK1 to points of cell-cell contact, which may be important for PTPmu-dependent signaling in response to cell-cell adhesion.