MAP (Mitogen-activated protein) kinases play an important role in regulating many critical cellular processes. The inactivation of MAP kinases is always accomplished by a family of dual-specificity phosphatases, termed MAPK phosphatases (MKPs). Here, we have identified a novel MKP-like protein, designated DMKP-4, from the Drosophila genome. DMKP-4 is a protein of 387 amino acids, with a dual-specificity phosphatase (DSP) catalytic domain. Recombinant protein DMKP-4 retains intrinsic phosphatase activity against chromogenic substrate pNPP. Overexpression of DMKP-4 inhibited the activation of ERK, JNK and p38 by H(2)O(2), sorbitol and heat shock in HEK293-T cells, and JNK activation in Drosophila S2 cells under PGN stimuli. "Knockdown" of DMKP-4 expression by RNAi significantly enhanced the PGN-stimulated activation of JNK, but not ERK nor p38. Further study revealed that DMKP-4 interacted specifically with JNK via its DSP domain. Mutation of Cys-126 to serine in the DSP domain of DMKP-4 not only eliminated its interaction with JNK, but also markedly reduced its phosphatase activity. Thus, DMKP-4 is a Drosophila homologue of mammalian MKPs, and may play important roles in the regulation of various developmental processes.