Mitogen-activated protein kinase phosphatase-2 (MKP-2) is a type 1 nuclear dual specific phosphatase (DUSP) implicated in a number of cancers. We examined the role of MKP-2 in the regulation of MAP kinase phosphorylation, cell proliferation, and survival responses in mouse embryonic fibroblasts (MEFs) derived from a novel MKP-2 (DUSP-4) deletion mouse. We show that serum and PDGF induced ERK-dependent MKP-2 expression in wild type MEFs but not in MKP-2(-/-) MEFs. PDGF stimulation of sustained ERK phosphorylation was enhanced in MKP-2(-/-) MEFs, whereas anisomycin-induced JNK was only marginally increased. However, marked effects upon cell growth parameters were observed. Cellular proliferation rates were significantly reduced in MKP-2(-/-) MEFs and associated with a significant increase in cell doubling time. Infection with adenoviral MKP-2 reversed the decrease in proliferation. Cell cycle analysis revealed a block in G(2)/M phase transition associated with cyclin B accumulation and enhanced cdc2 phosphorylation. MEFs from MKP-2(-/-) mice also showed enhanced apoptosis when stimulated with anisomycin correlated with increased caspase-3 cleavage and γH2AX phosphorylation. Increased apoptosis was reversed by adenoviral MKP-2 infection and correlated with selective inhibition of JNK signaling. Collectively, these data demonstrate for the first time a critical non-redundant role for MKP-2 in regulating cell cycle progression and apoptosis.