The ZAP-70 tyrosine kinase is a key component of the signaling machinery for the T cell antigen receptor (TCR). Whereas recruitment and activation of ZAP-70 are relatively well understood, the proteins phosphorylated by ZAP-70 are incompletely known. We report here that VHR, a Vaccinia virus VH1-related dual-specific protein phosphatase that inactivates the mitogen-activated kinases Erk2 and Jnk, is phosphorylated at Y138 by ZAP-70. Tyr138 phosphorylation was required for VHR to inhibit the Erk2-Elk-1 pathway and, conversely, the VHR(Y138F) mutant augmented TCR-induced Erk2 kinase and activation of the gene encoding interleukin 2. These results suggest that VHR is a target for ZAP-70 and tempers activation of the Erk2 pathway in a ZAP-70-controlled manner.