In addition to protein phosphorylation, redox-dependent post-translational modification of proteins is emerging as a key signaling system that has been conserved throughout evolution and that influences many aspects of cellular homeostasis. Both systems exemplify dynamic regulation of protein function by reversible modification, which, in turn, regulates many cellular processes such as cell proliferation, differentiation and apoptosis. In this article we focus on the interplay between phosphorylation- and redox-dependent signaling at the level of phosphotyrosine phosphatase-mediated regulation of receptor tyrosine kinases (RTKs). We propose that signal transduction by oxygen species through reversible phosphotyrosine phosphatase inhibition, represents a widespread and conserved component of the biochemical machinery that is triggered by RTKs.