Intracellular signaling pathways and their relationship to malignant progression have become a major focus of cancer biology. The dual-specificity phosphatase (DSP) family is a more recently identified family of intracellular signaling modulators. We have identified a novel protein phosphatase with a well-conserved DSP catalytic domain containing the DSP catalytic motif, xHCxxGxSRS, and mitogen-activated protein kinase phosphatase (MKP) motif, AYLM. Because of these unique characteristics, the protein was named mitogen-activated protein kinase phosphatase-8 (MKP-8). This protein is approximately 20kDa in size and mainly localizes to the nuclear compartment of the cell. MKP-8 is expressed in embryonal cancers (retinoblastoma, neuroepithelioma, and neuroblastoma) and has limited expression in normal tissues. MKP-8 displays significant phosphatase activity that is inhibited by a cysteine to serine substitution in the catalytic domain. When co-expressed with activated MAPKs, MKP-8 is able to inhibit p38 kinase phosphorylation and downstream activity.