Extracellular signal-regulated kinase (ERK), c-Jun N-terminal kinase/stress-activated protein kinase (JNK/SAPK), and p38/RK/CSBP (p38) mitogen-activated protein (MAP) kinases are target enzymes activated by a wide range of cell-surface stimuli. Recently, a distinct class of dual specificity phosphatase has been shown to reverse activation of MAP kinases by dephosphorylating critical tyrosine and threonine residues. By searching the expressed sequence tag data base (dbEST) for homologues of known dual specificity phosphatases, we identified a novel partial human sequence for which we isolated a full-length cDNA (termed MKP-4). The deduced amino acid sequence of MKP-4 is most similar to MKP-X/PYST2 (61% identity) and MKP-3/PYST1 (57% identity), includes two N-terminal CH2 domains homologous to the cell cycle regulator Cdc25 phosphatase, and contains the extended active site sequence motif VXVHCXAGXSRSXTX3AYLM (where X is any amino acid) conserved in dual specificity phosphatases. MKP-4 produced in Escherichia coli catalyzes vanadate-sensitive breakdown of p-nitrophenyl phosphate as well as in vitro inactivation of purified ERK2. When expressed in COS-7 cells, MKP-4 blocks activation of MAP kinases with the selectivity ERK > p38 = JNK/SAPK. This cellular specificity is similar to MKP-3/PYST1, although distinct from hVH-5/M3-6 (JNK/SAPK = p38 >>> ERK). Northern analysis reveals a highly restricted tissue distribution with a single MKP-4 mRNA species of approximately 2.5 kilobases detected only in placenta, kidney, and embryonic liver. Immunocytochemical analysis showed MKP-4 to be present within cytosol although punctate nuclear staining co-localizing with promyelocytic protein was also observed in a subpopulation (10-20%) of cells. Chromosomal localization by analysis of DNAs from human/rodent somatic cell hybrids and a panel of radiation hybrids assign the human gene for MKP-4 to Xq28. The identification and characterization of MKP-4 highlights the emergence of an expanding family of structurally homologous dual specificity phosphatases possessing distinct MAP kinase specificity and subcellular localization as well as diverse patterns of tissue expression.