Members of the phosphoprotein phosphatase (PPP) family of protein serine/threonine phosphatases, including protein phosphatase (PP)1, PP2A and PP2B, share invariant active-site residues that are critical for catalytic function [Zhuo, Clemens, Stone and Dixon (1994) J. Biol. Chem. 269, 26234–26238]. Mutation of the active-site residues Asp88 or His118 within the human PP2A catalytic subunit (PP2Ac)α impaired catalytic activity in vitro; the D88N and H118N substitutions caused a 9- and 23-fold reduction in specific activity respectively, when compared with wild-type recombinant PP2Ac, indicating an important role for these residues in catalysis. Consistent with this, the D88N and H118N substituted forms failed to provide PP2A function in vivo, because, unlike wild-type human PP2Acα, neither substituted for the endogenous PP2Ac enzyme of budding yeast. Relative to wild-type PP2Ac, the active-site mutants were dramatically overexpressed in High Five® insect cells using the baculovirus system. Milligram quantities of PP2Ac were purified from 1×109 High Five cells and the kinetic constants for dephosphorylation of the peptide RRA(pT)VA (single-letter amino-acid notation) by PP2Ac (Km = 337.5μM; kcat = 170s−1) and D88N (Km = 58.4μM; kcat = 2s−1) were determined. The results show that the substitution impairs catalysis severely without a significant effect on substrate binding, consistent with the PPP catalytic mechanism. Combination of the baculovirus and yeast systems provides a strategy whereby the structure–function of PP2Ac may be fully explored, a goal which has previously proven difficult, owing to the stringent auto-regulatory control of PP2Ac protein levels in vivo.