Dual specificity protein phosphatases (DSPs) regulate mitogenic signal transduction and control the cell cycle. Here, the crystal structure of a human DSP, vaccinia H1-related phosphatase (or VHR), was determined at 2.1 angstrom resolution. A shallow active site pocket in VHR allows for the hydrolysis of phosphorylated serine, threonine, or tyrosine protein residues, whereas the deeper active site of protein tyrosine phosphatases (PTPs) restricts substrate specificity to only phosphotyrosine. Positively charged crevices near the active site may explain the enzyme's preference for substrates with two phosphorylated residues. The VHR structure defines a conserved structural scaffold for both DSPs and PTPs. A "recognition region," connecting helix alpha1 to strand beta1, may determine differences in substrate specificity between VHR, the PTPs, and other DSPs.