MAP kinase phosphatase (MKP)-3 is a cytoplasmic dual specificity protein phosphatase that specifically binds to and inactivates the ERK1/2 MAP kinases in mammalian cells. However, the molecular basis of the cytoplasmic localization of MKP-3 or its physiological significance is unknown. We have used MKP-3-green fluorescent protein fusions in conjunction with leptomycin B to show that the cytoplasmic localization of MKP-3 is mediated by a chromosome region maintenance-1 (CRM1)-dependent nuclear export pathway. Furthermore, the nuclear translocation of MKP-3 seen in the presence of leptomycin B is mediated by an active process, indicating that MKP-3 shuttles between the nucleus and cytoplasm. The aminoterminal noncatalytic domain of MKP-3 is both necessary and sufficient for nuclear export of the phosphatase and contains a single functional leucine-rich nuclear export signal (NES). Even though this domain of the protein also mediates the binding of MKP-3 to MAP kinase, we show that mutations of the kinase interaction motif which abrogate ERK2 binding do not affect MKP-3 localization. Conversely, mutation of the NES does not affect either the binding or phosphatase activity of MKP-3 toward ERK2, indicating that the kinase interaction motif and NES function independently. Finally, we demonstrate that the ability of MKP-3 to cause the cytoplasmic retention of ERK2 requires both a functional kinase interaction motif and NES. We conclude that in addition to its established function in the regulated dephosphorylation and inactivation of MAP kinase, MKP-3 may also play a role in determining the subcellular localization of its substrate. Our results reinforce the idea that regulatory proteins such as MKP-3 may play a key role in the spatio-temporal regulation of MAP kinase activity.Dual specificity (Thr/Tyr) protein phosphatases play an important role in the regulation of signaling by mitogen-activated protein (MAP) 1 kinases in eukaryotic cells (1-3). These MAP kinase phosphatases (MKPs) act in direct opposition to the MAP kinase kinases (MKKs or MEKs) to dephosphorylate and inactivate the MAP kinase, thus regulating the duration and magnitude of activation and hence the biological outcome of signaling. Studies in Saccharomyces cerevisiae, Drosophila, and chicken embryos have also demonstrated that the expression of certain MKPs is induced in response to MAP kinase activation, indicating that they are components of negative feedback loops (4 -6). Furthermore, mathematical modeling of MAP kinase pathway dynamics emphasizes the role of MKPs in determining the timing and duration of MAP kinase activation in terms of bistable (switch-like) or monostable (proportional) response to agonists (7).There are 10 distinct MKPs in mammalian cells (3), and these enzymes feature a common structure comprising a carboxyl-terminal catalytic domain with sequence similarity to the prototypic VH1 dual specificity phosphatase of vaccinia virus (8) and an amino-terminal noncatalytic domain containing two short regions of homology with the cell ...