Our current study reports the first K(M) optimization of a library of nitrophenylphosphate-containing substrates for generating an inhibitor lead against the Yersinia pestis outer protein phosphatase (YopH). A high activity substrate identified by this method (K(M) = 80 μM) was converted from a substrate into an inhibitor by replacement of its phosphate group with difluoromethylphosphonic acid and by attachment of an aminooxy handle for further structural optimization by oxime ligation. A cocrystal structure of this aminooxy-containing platform in complex with YopH allowed the identification of a conserved water molecule proximal to the aminooxy group that was subsequently employed for the design of furanyl-based oxime derivatives. By this process, a potent (IC(50) = 190 nM) and nonpromiscuous inhibitor was developed with good YopH selectivity relative to a panel of phosphatases. The inhibitor showed significant inhibition of intracellular Y. pestis replication at a noncytotoxic concentration. The current work presents general approaches to PTP inhibitor development that may be useful beyond YopH.