In contrast to the wealth of information on cellular function of protein kinases, many of which are known to be the products of proto-oncogenes, little is known about how protein dephosphorylation is involved in growth control of normal and malignant cells. In the present study, roles of protein phosphatases in cell division cycle control were examined by molecular genetic approaches using a lower eukaryote, the fission yeast Schizosaccharomyces pombe. Nine protein phosphatase genes have been so far identified and characterized in this organism. Each of two (dis2+, sds21+, and ppa1+, ppa2+) gene products is highly similar to mammalian type 1 and 2A ser/thr phosphatases, respectively. The ppx1+ product is an intermediate of type 1 and 2A, while the ppb1+ product is similar to Ca(2+)-dependent type 2B. At least two protein tyrosine phosphatase genes (pyp1+ and pyp2+) exist. The cdc25 protein is now established to be a tyrosine phosphatase that activates cdc2 kinase. Some of these phosphatase genes are interrelated but have distinct, essential functions in cell cycle control. Missense mutations, deletions or high dosage expression of these phosphatase genes affect entry into and exit from mitosis, mitotic chromosome disjunction, cell size and cell shape. They seem to interact with the main regulators of mitosis, cdc2, cdc13/cyclin, cdc25 and weel, or with mitotic structural components, such as condensed chromosomes or the spindle apparatus. We show that the product of an essential gene, sds22+, is an important, positive factor in controlling the expression and modulating the activity of dis2 phosphatase.