With the goal of discovering the cellular functions of type 2C protein phosphatases, we have cloned and analyzed two ptc (phosphatase two C) genes, ptc2+ and ptc3+, from the fission yeast Schizosaccharomyces pombe. Together with the previously identified ptc1+ gene, the enzymes encoded by these genes account for approximately 90% of the measurable PP2C activity in fission yeast cells. No obvious growth defects result from individual disruptions of ptc genes, but a delta ptc1 delta ptc3 double mutant displays aberrant cell morphology and temperature-sensitive cell lysis that is further accentuated in a delta ptc1 delta ptc2 delta ptc3 triple mutant. These phenotypes are almost completely suppressed by the presence of osmotic stabilizers, strongly indicating that PP2C has an important role in osmoregulation. Genetic suppression of delta ptc1 delta ptc3 lethality identified two loci, mutations of which render cells hypersensitive to high-osmolarity media. One locus is identical to wis1+, encoding a MAP kinase kinase (MEK) homolog. The Wis1 sequence is most closely related to the Saccharomyces cerevisiae MEK encoded by PBS2, which is required for osmoregulation. These data indicate that divergent yeasts have functionally conserved MAP kinase pathways, which are required to increase intracellular osmotic concentrations in response to osmotic stress. Moreover, our observations implicate PP2C enzymes as also having an important role in signal transduction processes involved in osmoregulation, probably acting to negatively regulate the osmosensing signal that is transmitted through Wis1 MAP kinase kinase.