The phosphate ester is an extremely important chemical bond within the living cell, serving as an energy source, as a means of joining RNA/DNA molecules, and as an efficient mechanism to regulate the activity of enzymes and proteins by modifying amino acid side-chains. Protein phosphorylation is a highly regulated process by which information can be shuttled from the cell surface to the nucleus. There are two classes of enzymes that regulate signalling through the phosphorylation and dephosphorylation of proteins, namely protein kinases and protein phosphatases. This review will focus on the structure and function of the protein phosphatases. Protein phosphatases are generally divided into two main groups based on substrate specificity. Protein Phosphatases (PPs) specifically hydrolyze serine/threonine phosphoesters and Protein Tyrosine Phosphatases (PTPs) are phosphotyrosine-specific. A sub-family of PTPs, dual specificity phosphatases or dual specificity PTPs, are capable of efficient hydrolysis of both phosphotyrosine and phosphoserine/threonine. Recently solved X-ray structures of both PTPs and PPs have provided a wealth of new knowledge on the structure and catalytic mechanism of both enzyme families. Although both PPs and PTPs catalyze phosphoester hydrolysis, they utilize completely different structures and distinct catalytic mechanisms. These differences among the phosphatases are in stark contrast to the serine/threonine and tyrosine protein kinases which are all predicted to have a common structure (reviewed by