. In S. cerevisiae, a putative protein-tyrosine phosphatase encoded by PTP2 (22-24) negatively regulates the osmotic stress response pathway, and indirect evidence suggests this occurs by dephosphorylation of Hog1-phosphotyrosine (Hog1-Tyr(P)) (25).We sought to examine further the regulation of MAPK pathways by identifying and characterizing protein phosphatases that act on the HOG pathway in S. cerevisiae. This pathway allows yeast to grow in high osmolarity environments by inducing the expression of osmoprotectants via activation of the MAPK module, Pbs2-Hog1 (Fig. 1) (26). Upstream of the MAPK module is a negative regulator, the "two-component system," comprised of three sequentially acting kinases including Sln1, a plasma membrane bound histidine/aspartyl kinase, Ypd1, a histidine kinase, and Ssk1, an aspartyl kinase (25,27,28). These kinases negatively regulate two MEKKs called Ssk2 and Ssk22 (29). There is also a positive regulator upstream of the MAPK module called Sho1 which activates Pbs2 directly (29). The model for activation of this pathway is as follows. Osmotic