We have reported recently that the dual specificity mitogen-activated protein kinase phosphatase-3 (MKP-3) elicits highly selective inactivation of the extracellular signal-regulated kinase (ERK) class of mitogen-activated protein (MAP) kinases (Muda, M., Theodosiou, A., Rodrigues, N., Boschert, U., Camps, M., Gillieron, C., Davies, K., Ashworth, A., and Arkinstall, S. (1996) J. Biol. Chem. 271, 27205-27208). We now show that MKP-3 enzymatic specificity is paralleled by tight binding to both ERK1 and ERK2 while, in contrast, little or no interaction with either c-Jun N-terminal kinase/stress activated protein kinase (JNK/SAPK) or p38 MAP kinases was detected. Further study revealed that the N-terminal noncatalytic domain of MKP-3 (MKP-3DeltaC) binds both ERK1 and ERK2, while the C-terminal MKP-3 catalytic core (MKP-3DeltaN) fails to precipitate either of these MAP kinases. A chimera consisting of the N-terminal half of MKP-3 with the C-terminal catalytic core of M3-6 also bound tightly to ERK1 but not to JNK3/SAPKbeta. Consistent with a role for N-terminal binding in determining MKP-3 specificity, at least 10-fold higher concentrations of purified MKP-3DeltaN than full-length MKP-3 is required to inhibit ERK2 activity. In contrast, both MKP-3DeltaN and full-length MKP-3 inactivate JNK/SAPK and p38 MAP kinases at similarly high concentrations. Also, a chimera of the M3-6 N terminus with the MKP-3 catalytic core which fails to bind ERK elicits non selective inactivation of ERK1 and JNK3/SAPKbeta. Together, these observations suggest that the physiological specificity of MKP-3 for inactivation of ERK family MAP kinases reflects tight substrate binding by its N-terminal domain.