Protein phosphatases are critical regulators in eukaryotic cells. For example, the budding yeast Saccharomyces cerevisiae dual specificity protein phosphatase (DSP) ScYvh1 regulates growth, sporulation, and glycogen accumulation. Despite such importance, functions of Yvh1 proteins in filamentous fungi are not well understood. In this study, we characterized putative protein phosphatase MoYvh1, an Yvh1 homolog in the rice blast fungus Magnaporthe oryzae. Deletion of the MoYVH1 gene resulted in significant reductions in vegetative growth, conidial production, and virulence. The ΔMoyvh1 mutant also displayed defects in cell-wall integrity and was hyposensitive to the exogenous osmotic stress. Further examination revealed that the ΔMoyvh1 mutant had defects in appressorium function and invasive hyphae growth, resulting attenuated pathogenicity. Interestingly, we found that MoYvh1 affects the scavenging of host-derived reactive oxygen species that promotes M. oryzae infection. Finally, overexpression of the phosphodiesterase MoPDEH suppressed the defects in conidia formation and pathogenicity of the ΔMoyvh1 mutant, suggesting MoYvh1 could regulate MoPDEH for its function. Our study reveals not only the importance of MoYvh1 proteins in growth, differentiation, and virulence of the rice blast fungus but, also, a genetic link between MoYvh1 and MoPDEH-cAMP signaling in this fungus.