When Dictyostelium cells that have initiated their developmental program upon starvation are returned to growth medium, there is a rapid and transient de novo tyrosine phosphorylation of a 43-kilodalton protein. This protein was found to be actin. Most of the phosphorylation occurred in a single, minor acidic isoform of actin. Developing cells that had been returned to growth medium lost their pseudopod extensions, became round, and had reduced adhesion to the substratum. These effects occurred with kinetics that matched the increase in tyrosine phosphorylation of actin. In mutant cell lines in which the gene for the phosphotyrosine phosphatase PTP1 had been disrupted, tyrosine phosphorylation of actin was rapid and more prolonged. These cells responded with proportionally accelerated kinetics of cell rounding. Cell lines overexpressing PTP1 had diminished amplitude and duration of actin tyrosine phosphorylation and exhibited diminished cell-shape change and an accelerated return to the extended cell-shape morphology seen in starved cells.