The haematopoietic protein tyrosine phosphatase (HePTP) is a negative regulator of the MAP kinases Erk1, Erk2 and p38. HePTP binds to these kinases through a kinase-interaction motif (KIM) in its non-catalytic amino terminus and inactivates them by dephosphorylating the critical phosphorylated tyrosine residue in their activation loop. Here we show that cyclic-AMP-dependent protein kinase (PKA) phosphorylates serine residue 23 in the KIM of HePTP in vitro and in intact cells. This modification reduces binding of MAP kinases to the KIM, an effect that is prevented by mutation of serine 23 to alanine. The PKA-mediated release of MAP kinase from HePTP is sufficient to activate the kinase and to induce transcription from the c-fos promoter. Expression of a HePTP serine-23-to-alanine mutant inhibits MAP-kinase dissociation and activation and induction of transcription from the c-fos promoter. We conclude that HePTP not only controls the activity of MAP kinases, but also mediates crosstalk between the cAMP system and the MAP-kinase cascade.