Biochemical evidence revealed protein tyrosine kinase and phosphatase activities in the human malarial parasite Plasmodium falciparum, a member of the Apicomplexa. A novel cDNA sequence of a dual-specificity phosphatase was identified in both sexual and asexual stages of P. falciparum, and named PfYVH1, since the predicted primary structure of the 278-amino acid polypeptide showed significant similarity to the human and yeast YVH1 phosphatases. The N-terminal half of PfYVH1 contained a conserved tyrosine phosphatase catalytic domain within a dual-specificity phosphatase domain. The C-terminal region, consisting of one histidine and eight cysteines, represented a zinc-binding domain with a potentially unconventional architecture. Recombinant PfYVH1 contained 2mol of zinc per mol protein and dephosphorylated both phosphoserine and phosphotyrosine residues. Mutation of specific Cys residues in the putative zinc finger region abolished zinc binding and drastically reduced phosphatase activity, suggesting an allosteric role of zinc in catalysis. PfYVH1 was expressed in essentially all erythrocytic stages of the parasite, and shuttled between the nucleus and the cytoplasm in a stage-specific manner. A Plasmodium ortholog of the nuclear pescadillo protein (PfPES) was also characterized and shown to interact with PfYVH1, thus implicating PfYVH1 in the regulation of parasitic development. PfYVH1 represents the first dual-specificity zinc-finger phosphatase characterized in the protozoan kingdom.