A novel human protein serine/threonine phosphatase, PP5, and a structurally related phosphatase in Saccharomyces cerevisiae, PPT1, have been identified from their cDNA and gene respectively. Their predicted molecular mass is 58 kDa and they comprise a C-terminal phosphatase catalytic domain and an N-terminal domain, which has four repeats of 34 amino acids, three of which are tandemly arranged. The phosphatase domain possesses all the invariant motifs of the PP1/PP2A/PP2B gene family, but is not closely related to any other known member (< or = 40% identity). Thus PP5 and PPT1 comprise a new subfamily. The repeats in the N-terminal domain are similar to the tetratricopeptide repeat (TPR) motifs which have been found in several proteins that are required for mitosis, transcription and RNA splicing. Bacterially expressed PP5 is able to dephosphorylate serine residues in proteins and is more sensitive than PP1 to the tumour promoter okadaic acid. A 2.3 kb mRNA encoding PP5 is present in all human tissues examined. Investigation of the intracellular distribution of PP5 by immunofluorescence, using two different antibodies raised against the TPR and phosphatase domains, localizes PP5 predominantly to the nucleus. This suggests that, like other nuclear TPR-containing proteins, it may play a role in the regulation of RNA biogenesis and/or mitosis.