The extracellular signal-regulated protein kinase 2 (ERK2) plays a central role in cellular proliferation and differentiation. Full activation of ERK2 requires dual phosphorylation of Thr 183 and Tyr 185 in the activation loop. Tyr 185 dephosphorylation by the hematopoietic protein-tyrosine phosphatase (HePTP) represents an important mechanism for down-regulating ERK2 activity. The bisphosphorylated ERK2 is a highly efficient substrate for HePTP with a k cat /K m of 2.6 ؋ 10 6 M ؊1 s ؊1 . In contrast, the k cat /K m values for the HePTP-catalyzed hydrolysis of Tyr(P) peptides are 3 orders of magnitude lower. To gain insight into the molecular basis for HePTP substrate specificity, we analyzed the effects of altering structural features unique to HePTP on the HePTP-catalyzed hydrolysis of p-nitrophenyl phosphate, Tyr(P) peptides, and its physiological substrate ERK2. Our results suggest that substrate specificity is conferred upon HePTP by both negative and positive selections. To avoid nonspecific tyrosine dephosphorylation, HePTP employs Thr 106 in the substrate recognition loop as a key negative determinant to restrain its protein-tyrosine phosphatase activity. The extremely high efficiency and fidelity of ERK2 dephosphorylation by HePTP is achieved by a bipartite protein-protein interaction mechanism, in which docking interactions between the kinase interaction motif in HePTP and the common docking site in ERK2 promote the HePTP-catalyzed ERK2 dephosphorylation (ϳ20-fold increase in k cat /K m ) by increasing the local substrate concentration, and second site interactions between the HePTP catalytic site and the ERK2 substrate-binding region enhance catalysis (ϳ20-fold increase in k cat /K m ) by organizing the catalytic residues with respect to Tyr(P) 185 for optimal phosphoryl transfer.The mitogen-activated protein (MAP) 1 kinases are central components in cellular signaling (1-3). The extent and duration of MAP kinase activation in response to extracellular stimuli are tightly regulated in a cell type-and stimulus-dependent manner, because of the coordinated action of protein kinases and phosphatases. Full activation of the MAP kinases requires dual phosphorylation of the Thr and Tyr residues in the activation loop by specific MAP kinase kinases. Downregulation of MAP kinase activity is carried out by multiple protein phosphatases, including Ser/Thr-specific, Tyr-specific, and dual specificity phosphatases (4). This would inevitably lead to the formation of monophosphorylated MAP kinases. Indeed, recent evidence indicates that both forms of the monophosphorylated extracellular signal-regulated kinase 2 (ERK2), a founding member of the MAP kinase family, exist in living cells, in addition to the bisphosphorylated and unphosphorylated forms (5, 6). Interestingly, the activity of the monophosphorylated ERK2/pY and ERK2/pT is ϳ2 and 3 orders of magnitude higher than that of the unphosphorylated ERK2 and is only 1 and 2 orders of magnitude lower than that of the fully active bisphosphorylated ERK2/pTpY (7). ...