The Wip1 phosphatase is an oncogene that is overexpressed in a variety of primary human cancers. We were interested in identifying genetic variants that could change Wip1 activity. We identified 3 missense SNPs of the human Wip1 phosphatase, L120F, P322Q, and I496V confer a dominant-negative phenotype. On the other hand, in primary human cancers, PPM1D mutations commonly result in a gain-of-function phenotype, leading us to identify a hot-spot truncating mutation at position 525. Surprisingly, we also found a significant number of loss-of-function mutations of PPM1D in primary human cancers, both in the phosphatase domain and in the C terminus. Thus, PPM1D has evolved to generate genetic variants with lower activity, potentially providing a better fitness for the organism through suppression of multiple diseases. In cancer, however, the situation is more complex, and the presence of both activating and inhibiting mutations requires further investigation to understand their contribution to tumorigenesis.