Protein phosphatases are signal transducing enzymes that dephosphorylate intracellular proteins phosphorylated on serine, threonine, and tyrosine residues. This brief review surveys recently determined structures of members of the protein tyrosine phosphatase and protein serine/threonine phosphatase families. In each family, characteristic and distinct structures confer different enzymatic mechanisms in catalyzing dephosphorylation reactions. Within each family, however, there exists remarkable similarity in active-site conformation and catalytic mechanism despite, in some cases, little or no sequence homology. The crystal structures also provide the basis for understanding the substrate binding specificity, inhibition by physiologically relevant compounds, and regulation of the protein phosphatases.