A cDNA encoding a novel human extracellularly-regulated kinase (ERK) phosphatase, designated B59, was isolated from a B5/589 human mammary epithelial cell cDNA library. The 1104 nucleotide open reading frame encodes 368 amino acids including the highly conserved catalytic site sequence of protein phosphotyrosine phosphatases (PTPs), VXVHCXXGXXR, at amino acid position 276-287. The predicted 70 amino acid stretch surrounding the HC motif shares significant sequence identity with other human dual specificity PTPs (dsPTPs), including the known ERK PTPs CL100, PAC1, B23, as well as the dsPTPs VH-1 and VHR. B59 protein synthesized in vitro in a rabbit reticulocyte lysate dephosphorylated rat ERK1 and ERK2 proteins whose phosphorylation had been stimulated by v-mos kinase added to the lysate. Ectopic expression of B59 in NIH3T3 fibroblasts inhibited the induction of an oncogene-responsive promoter by the dominant-activating raf mutant, raf-BXB. Moreover, cotransfection of NIH3T3 cells with B59 inhibited morphological transformation by H-ras and v-raf oncogenes. These results suggest that B59 suppresses the transforming activity of H-ras or v-raf oncogenes through ERK dephosphorylation and inactivation.