Protein phosphatase 2A (PP2A) is an essential intracellular serine/threonine phosphatase containing a catalytic subunit that possesses the potential to dephosphorylate promiscuously tyrosine-phosphorylated substrates in vitro. How PP2A acquires its intracellular specificity and activity for serine/threonine-phosphorylated substrates is unknown. Here we report a novel and phylogenetically conserved mechanism to generate active phospho-serine/threonine-specific PP2A in vivo. Phosphotyrosyl phosphatase activator (PTPA), a protein of so far unknown intracellular function, is required for the biogenesis of active and specific PP2A. Deletion of the yeast PTPA homologs generated a PP2A catalytic subunit with a conformation different from the wild-type enzyme, as indicated by its altered substrate specificity, reduced protein stability, and metal dependence. Complementation and RNA-interference experiments showed that PTPA fulfills an essential function conserved from yeast to man.