A novel dual specificity phosphatase (DSP) designated LMW-DSP2 was cloned with a combination of reverse transcription-polymerase chain reaction and cDNA library screening strategies. The LMW-DSP2 open reading frame of 194 amino acids contained a single DSP catalytic domain but lacked the cdc25 homology domain, which is conserved in most known DSPs. Northern blot and reverse transcription-polymerase chain reaction analyses revealed that LMW-DSP2 was specifically expressed in testis. Recombinant LMW-DSP2 protein exhibited phosphatase activity toward an artificial low molecular weight substrate para-nitrophenyl phosphate, and the activity was inhibited completely by sodium orthovanadate but not sodium fluoride, pyrophosphate, and okadaic acid. The substitution of critical amino acid residues, aspartic acid and cysteine, resulted in a dramatic reduction of phosphatase activity. Transient transfection of LMW-DSP2 in COS7 cells resulted in the expression of a 21-kDa protein, and the phosphatase was shown to be distributed in both the cytosol and the nucleus. LMW-DSP2 dephosphorylated and deactivated p38, to a higher extent, and stress-activated protein kinase (SAPK)/c-Jun N-terminal kinase (JNK), but not extracellular signal-regulated kinase 1/2 mitogen-activated protein kinases, in transfected COS7 cells and in vitro. Interestingly, mutation in a conserved docking motif of p38 and SAPK/JNK as well as in a cluster of aspartic acids of LMW-DSP2 did not affect the deactivation of the mitogen-activated protein kinases by LMW-DSP2. Furthermore, the binding between LMW-DSP2 and p38 and SAPK/JNK was also not disrupted by such mutations. Among the DSPs lacking the cdc25 homology domain, LMW-DSP2 is the first one that dephosphorylates and deactivates p38 and SAPK/JNK.