In the Caenorhabditis elegans hermaphrodite germline, spatially restricted mitogen-activated protein kinase (MAPK) signalling controls the meiotic cell cycle. First, the MAPK signal is necessary for the germ cells to progress through pachytene of meiotic prophase I. As the germ cells exit pachytene and enter diplotene/diakinesis, MAPK is inactivated and the developing oocytes arrest in diakinesis (G(2)/M arrest). During oocyte maturation, a signal from the sperm reactivates MAPK to promote M phase entry. Here, we show that the MAPK phosphatase LIP-1 dephosphorylates MAPK as germ cells exit pachytene in order to maintain MAPK in an inactive state during oocyte development. Germ cells lacking LIP-1 fail to arrest the cell cycle at the G(2)/M boundary, and they enter a mitotic cell cycle without fertilization. LIP-1 thus coordinates oocyte cell cycle progression and maturation with ovulation and fertilization.