Originally identified from eukaryotes, the Mg 2+ -or Mn 2+ -dependent protein phosphatases (PPMs) are a diverse group of enzymes whose members include eukaryotic PP2C and some prokaryotic serine/threonine phosphatases. In a previous study, unexpectedly large numbers of PPMs were identified in two Streptomyces genomes. In this work, a phylogenetic analysis was performed with all the PPMs available from a wide variety of microbial sources to determine the evolutionary origin of the Streptomyces PPM proteins. Consistent with earlier hypotheses, the results suggested that the microbial PPMs were relatively recent additions from eukaryotic sources. Results also indicated that the Streptomyces PPMs were divided into two major subfamilies at an early stage of their emergence in Streptomyces genomes. The first subfamily, which contains only six Streptomyces PPMs, possesses a catalytic domain whose sequence and architecture are similar to that of eukaryotic PPMs; the second subfamily contains 89 Streptomyces PPMs that lack the 5a and 5b catalytic domain motifs, similar to the PPMs SpoIIE and RsbU of Bacillus subtilis. Significant gene duplication was observed for the PPMs in the second subfamily. In addition, more than half (54 %) of the Streptomyces PPMs from the second subfamily were found to have at least one additional sensory domain, most commonly the PAS or the GAF domain. Phylogenetic analysis showed that these domains tended to be clustered according to the putative physiological functions rather than taxonomic relationship, implying that they might have arisen as a result of domain recruitment in a late evolutionary stage. This study provides an insight into how Streptomyces spp. may have expanded their PPM-based signal transduction networks to enable them to respond to a greater range of environmental changes.