Although therapeutic interventions of signal-transduction cascades with targeted kinase inhibitors are a well-established strategy, drug-discovery efforts to identify targeted phosphatase inhibitors have proven challenging. Herein we report a series of allosteric, small-molecule inhibitors of wild-type p53-induced phosphatase (Wip1), an oncogenic phosphatase common to multiple cancers. Compound binding to Wip1 is dependent on a 'flap' subdomain located near the Wip1 catalytic site that renders Wip1 structurally divergent from other members of the protein phosphatase 2C (PP2C) family and that thereby confers selectivity for Wip1 over other phosphatases. Treatment of tumor cells with the inhibitor GSK2830371 increases phosphorylation of Wip1 substrates and causes growth inhibition in both hematopoietic tumor cell lines and Wip1-amplified breast tumor cells harboring wild-type TP53. Oral administration of Wip1 inhibitors in mice results in expected pharmacodynamic effects and causes inhibition of lymphoma xenograft growth. To our knowledge, GSK2830371 is the first orally active, allosteric inhibitor of Wip1 phosphatase.