The emerging pharmacological target soluble epoxide hydrolase (sEH) is a bifunctional enzyme exhibiting two different catalytic activities that are located in two distinct domains. Although the physiological role of the C-terminal hydrolase domain is well-investigated, little is known about its phosphatase activity, located in the N-terminal phosphatase domain of sEH (sEH-P). Herein we report the discovery and optimization of the first inhibitor of human and rat sEH-P that is applicable in vivo. X-ray structure analysis of the sEH phosphatase domain complexed with an inhibitor provides insights in the molecular basis of small-molecule sEH-P inhibition and helps to rationalize the structure-activity relationships. 4-(4-(3,4-Dichlorophenyl)-5-phenyloxazol-2-yl)butanoic acid (22b, SWE101) has an excellent pharmacokinetic and pharmacodynamic profile in rats and enables the investigation of the physiological and pathophysiological role of sEH-P in vivo.