With the recent clinical success of drugs targeting protein kinase activity, drug discovery efforts are focusing on the role of reversible protein phosphorylation in disease states. The activity of protein phosphatases, enzymes that oppose protein kinases, can also be manipulated to alter cellular signaling for therapeutic benefits. In this review, we present protein serine/ threonine phosphatases as viable therapeutic targets, discussing past successes, current challenges, and future strategies for modulating phosphatase activity.Numerous cellular processes, including metabolism, immune response, synaptic plasticity, cell growth and proliferation, and apoptosis, are controlled by intricate signal transduction networks composed of molecules and macromolecular protein complexes that are responsive to biological or chemical stimuli in the cell's immediate environment. A common mechanism used by cells to either propagate or terminate intracellular signal transduction pathways is reversible protein phosphorylation, whereby the addition or removal of a negatively charged phosphate can alter the conformation of a target protein and/or its interactions with other proteins. Ultimately, phosphorylation/dephosphorylation reactions affect the activity, function, half-life, or subcellular localization of the substrate; hence, the underlying molecular mechanisms controlling this reversible post-translational modification are of great physiological importance.Careful study has been afforded to the structure, function, and regulation of the enzymes that catalyze phosphorylation or dephosphorylation reactions-protein kinases and phosphatases, respectively. It is widely accepted that proper spatial and temporal regulation of both protein kinases and phosphatases is crucial for maintaining the appropriate balance of phosphorylation required for cellular homeostasis (Bauman and Scott, 2002). Because deregulation of these enzymes has been implicated in a variety of diseases (e.g., cancer, diabetes, cardiac hypertrophy, and neurodegeneration), emerging therapeutic strategies have focused on the design of drugs that affect the biological actions of kinases and phosphatases.Protein kinases have become increasingly popular drug targets, constituting ϳ30% of several pharmaceutical manufacturers' drug discovery programs (Cohen, 2002a). The approval of rapamycin (Sirolimus) for immunosuppression,