The wild-type p53-induced phosphatase Wip1 (PP2Cdelta or PPM1D) is a member of the protein phosphatase 2C (PP2C) family and controls cell cycle checkpoints in response to DNA damage. p38 MAPK and ATM were identified as physiological substrates of Wip1, and we previously reported a substrate motif that was defined using variants of the p38(180pT 182pY) diphosphorylated peptide, TDDEMpTGpYVAT. However, the substrate recognition motifs for Wip1 have not been fully defined as the sequences surrounding the targeted residues in ATM and p38 MAPK appear to be unrelated. Using a recombinant human Wip1 catalytic domain (rWip1), in this study we measured the kinetic parameters for variants of the ATM(1981pS) phosphopeptide, AFEEGpSQSTTI. We found that rWip1 dephosphorylates phosphoserine and phosphothreonine in the p(S/T)Q motif, which is an essential requirement for substrate recognition. In addition, acidic, hydrophobic, or aromatic amino acids surrounding the p(S/T)Q sequence have a positive influence, while basic amino acids have a negative influence on substrate dephosphorylation. The kinetic constants allow discrimination between true substrates and nonsubstrates of Wip1, and we identified several new putative substrates that include HDM2, SMC1A, ATR, and Wip1 itself. A three-dimensional molecular model of Wip1 with a bound substrate peptide and site-directed mutagenesis analyses suggested that the important residues for ATM(1981pS) substrate recognition are similar but not identical to those for the p38(180pT 182pY) substrate. Results from this study should be useful for predicting new physiological substrates that may be regulated by Wip1 and for developing selective anticancer drugs.