Wound signaling pathways in plants are mediated by mitogen-activated protein kinases (MAPKs) and stress hormones, such as ethylene and jasmonates. In Arabidopsis thaliana, the transmission of wound signals by MAPKs has been the subject of detailed investigations; however, the involvement of specific phosphatases in wound signaling is not known. Here, we show that AP2C1, an Arabidopsis Ser/Thr phosphatase of type 2C, is a novel stress signal regulator that inactivates the stress-responsive MAPKs MPK4 and MPK6. Mutant ap2c1 plants produce significantly higher amounts of jasmonate upon wounding and are more resistant to phytophagous mites (Tetranychus urticae). Plants with increased AP2C1 levels display lower wound activation of MAPKs, reduced ethylene production, and compromised innate immunity against the necrotrophic pathogen Botrytis cinerea. Our results demonstrate a key role for the AP2C1 phosphatase in regulating stress hormone levels, defense responses, and MAPK activities in Arabidopsis and provide evidence that the activity of AP2C1 might control the plant's response to B. cinerea.