The Lymphoid specific tyrosine phosphatase (Lyp) has elicited tremendous research interest due to the high risk of its missense mutation R620W in a wide spectrum of autoimmune diseases. While initially characterized as a gain-of-function mutant, R620W was thought to lead to autoimmune diseases through loss-of-function in T cell signaling by a recent study. Here we investigate the biochemical characters and T cell signaling functions of two uncharacterized Lyp variants S201F and R266W, together with a previously characterized Lyp variant R263Q, which had reduced risk in several autoimmune diseases, including systemic lupus erythematosus (SLE), ulcerative colitis (UC) and rheumatoid arthritis (RA). Our kinetic and functional studies of R263Q polymorphism basically reproduced previous findings that it was a loss-of-function mutant. The other variant S201F reduced Lyp phosphatase activity moderately and decreased Lyp function in T cell slightly, while R266W severely impaired phosphatase activity and was a loss-of-function variant in T cell signaling. A combined kinetic and structure analysis suggests that the R266W variant may decrease its phosphatase activity through perturbing either the Q-loop or the WPD loop of Lyp. As both R266W and R263Q significantly change their phosphatase activity and T cell functions, future work could be considered to evaluate these mutants in a broader spectrum of autoimmune diseases.