Lymphoid malignancies are characterized by an accumulation of genetic lesions that act co-operatively to perturb signaling pathways and alter gene expression programs. The Janus kinases (JAK)–signal transducers and activators of transcription (STATs) pathway is one such pathway that is frequently mutated in leukemia and lymphoma. In response to cytokines and growth factors, a cascade of reversible tyrosine phosphorylation events propagates the JAK–STAT pathway from the cell surface to the nucleus. Activated STAT family members then play a fundamental role in establishing the transcriptional landscape of the cell. In leukemia and lymphoma, somatic mutations have been identified in JAK and STAT family members, as well as, negative regulators of the pathway. Most recently, inactivating mutations in the protein tyrosine phosphatase (PTP) genes PTPN1 (PTP1B) and PTPN2 (TC-PTP) were sequenced in B cell lymphoma and T cell acute lymphoblastic leukemia (T-ALL) respectively. The loss of PTP1B and TC-PTP phosphatase activity is associated with an increase in cytokine sensitivity, elevated JAK–STAT signaling, and changes in gene expression. As inactivation mutations in PTPN1 and PTPN2 are restricted to distinct subsets of leukemia and lymphoma, a future challenge will be to identify in which cellular contexts do they contributing to the initiation or maintenance of leukemogenesis or lymphomagenesis. As well, the molecular mechanisms by which PTP1B and TC-PTP loss co-operates with other genetic aberrations will need to be elucidated to design more effective therapeutic strategies.