Protein Tyrosine Phosphatases (PTPs) are drug target candidates due to their role in signal transduction and involvement in various pathologies. Difficulty in developing orthosteric inhibitors of PTPs suitable for therapeutic purposes has raised interest in the development of allosteric inhibitors, yet no allosteric regulatory model has been formulated for most PTP subtypes. For the two PTPs, belonging to two distinct subtypes, for which such mechanisms have been characterized, SHP2 and PTP1B, they have paved the way to development of specific inhibitors which show promise for future development of small molecule therapeutics. In this study we achieved the formulation and in vitro validation of a novel structure-based allosteric model for RPTPα and discuss its mechanistic implications, potential for drug discovery and possible applicability to other PTPs.