Protein phosphatase 4 (PP4; also named PPX or PPP4) is a PP2A-related protein serine/threonine phosphatase with important roles in a variety of cellular processes such as microtubule growth/organization, apoptosis, tumor necrosis factor (TNF)-alpha signaling, and activation of c-Jun N-terminal kinase and NF-kappaB. To further investigate the cellular functions of PP4, we isolated and identified PP4-interacting proteins using a proteomic approach. We found that insulin receptor substrate 4 (IRS-4) interacted with PP4 and that this interaction was enhanced following TNF-alpha stimulation. We also found that PP4, but not PP2A, down-regulated IRS-4 in a phosphatase activity-dependent manner. Pulse-chase analysis revealed that PP4 decreased the half-life of IRS-4 from 4 to 1 h. Moreover, we found that TNF-alpha stimulated a PP4-dependent degradation of IRS-4, as indicated by the blockage of the degradation by a potent PP4 inhibitor (okadaic acid) and a phosphatase-dead PP4 mutant (PP4-RL). Taken together, our studies indicate that IRS-4 is subject to regulation by TNF-alpha and that PP4 mediates TNF-alpha-induced degradation of IRS-4.