Auxin is an important plant hormone that plays significant roles in plant growth and development. Although numerous auxin-response mutants have been identified, auxin signal transduction pathways remain to be fully elucidated. We isolated ibr5 as an Arabidopsis indole-3-butyric acid-response mutant, but it also is less responsive to indole-3-acetic acid, synthetic auxins, auxin transport inhibitors, and the phytohormone abscisic acid. Like certain other auxin-response mutants, ibr5 has a long root and a short hypocotyl when grown in the light. In addition, ibr5 displays aberrant vascular patterning, increased leaf serration, and reduced accumulation of an auxin-inducible reporter. We used positional information to determine that the gene defective in ibr5 encodes an apparent dual-specificity phosphatase. Using immunoblot and promoter-reporter gene analyses, we found that IBR5 is expressed throughout the plant. The identification of IBR5 relatives in other flowering plants suggests that IBR5 function is conserved throughout angiosperms. Our results suggest that IBR5 is a phosphatase that modulates phytohormone signal transduction and support a link between auxin and abscisic acid signaling pathways.