Protein phosphorylation is a major reversible post‐translational modification. Protein phosphatases function as ‘critical regulators’ in signaling networks through dephosphorylation of proteins, which have been phosphorylated by protein kinases. A large understanding of their working has been sourced from animal systems rather than the plant or the prokaryotic systems. The eukaryotic protein phosphatases include phosphoprotein phosphatases (PPP), metallo‐dependent protein phosphatases (PPM), protein tyrosine (Tyr) phosphatases (PTP), and aspartate (Asp)‐dependent phosphatases. The PPP and PPM families are serine(Ser)/threonine(Thr)‐specific phosphatases (STPs), while PTP family is Tyr specific. Dual‐specificity phosphatases (DsPTPs/DSPs) dephosphorylate Ser, Thr, and Tyr residues. PTPs lack sequence homology with STPs, indicating a difference in catalytic mechanisms, while the PPP and PPM families share a similar structural fold indicating a common catalytic mechanism. The catalytic cysteine (Cys) residue in the conserved HCX5R active site motif of the PTPs acts as a nucleophile during hydrolysis. The PPP members require metal ions, which coordinate the phosphate group of the substrate, followed by a nucleophilic attack by a water molecule and hydrolysis. The variable holoenzyme assembly of protein phosphatase(s) and the overlap with other post‐translational modifications like acetylation and ubiquitination add to their complexity. Though their functional characterization is extensively reported in plants, the mechanistic nature of their action is still being explored by researchers. In this review, we exclusively overview the plant protein phosphatases with an emphasis on their mechanistic action as well as structural characteristics.