Myosin phosphatase negatively regulates nonmuscle myosin II through dephosphorylation of the myosin regulatory light chain (MRLC). Its regulatory myosin-binding subunit, MBS, is responsible for regulating the catalytic subunit in response to upstream signals and for determining the substrate specificity. DMBS, the Drosophila homolog of MBS, was identified to study the roles of myosin phosphatase in morphogenesis. The embryos defective for both maternal and zygotic DMBS demonstrated a failure in dorsal closure. In the mutant embryos, the defects were mainly confined to the leading edge cells which failed to fully elongate. Ectopic accumulation of phosphorylated MRLC was detected in lateral region of the leading edge cells, suggesting that the role of DMBS is to repress the activation of nonmuscle myosin II at the subcellular location for coordinated cell shape change. Aberrant accumulation of F-actin within the leading edge cells may correspond to the morphological aberrations of such cells. Similar defects were seen in embryos overexpressing Rho-kinase, suggesting that myosin phosphatase and Rho-kinase function antagonistically. The genetic interaction of DMBS with mutations in the components of the Rho signaling cascade also indicates that DMBS functions antagonistically to the Rho signal transduction pathway. The results indicate an important role for myosin phosphatase in morphogenesis.