The expression of the human CL100 gene and its mouse homologue 3CH134 is increased up to 40-fold in fibroblasts exposed to oxidative/heat stress and growth factors. CL100 is a member of an expanding family of protein tyrosine phosphatases with amino acid sequence similarity to a Tyr/Ser-protein phosphatase encoded by the late H1 gene of vaccinia virus. Here we show that the CL100 phosphatase, expressed and purified in bacteria, rapidly and potently inactivates recombinant MAP kinase in vitro by the concomitant dephosphorylation of both its phosphothreonine and phosphotyrosine residues. Furthermore, CL100 suppresses the [val12] ras-induced activation of MAP kinase in a cell-free system from Xenopus oocytes. Both activities are abolished by mutagenesis of the highly conserved cysteine (Cys-258) within the phosphatase active site. In contrast to the vaccinia H1 phosphatase, CL100 shows no measurable catalytic activity towards a number of other substrate proteins modified on serine, threonine or tyrosine residues. Our results demonstrate that CL100 is a dual specificity phosphatase and indicate that MAP kinase is one of its physiological targets. CL100 may be the first example of a new class of protein phosphatases responsible for modulating the activation of MAP kinase following exposure of quiescent cells to growth factors and further implicates MAP kinase activation/deactivation in the cellular response to stress.