The timing and activation of the p34cdc2 kinase in mammals is associated with dephosphorylation of phosphotyrosine and phosphothreonine residues on the p34cdc2 kinase. For fission yeast, the timing of mitosis is regulated by cyclic accumulation of cdc25, which promotes dephosphorylation of p34cdc2 and concomitant protein kinase activation. We report the identification and characterization of a structural and functional mouse homolog, Cdc25M2, of the cdc25 phosphatase. Cdc25M2 shows high sequence identity to the previously reported human homolog cdc25Hu2. Cdc25M2 can functionally complement for a Schizosaccharomyces pombe cdc25ts mutation, and when expressed in Escherichia coli and purified, Cdc25M2 is an active phosphatase. cdc25M2 mRNA shows variation in expression in different tissues in the mouse embryo and is expressed in a developmental and cell-cycle-dependent fashion. We suggest that the expression and accumulation of the cdc25 mitotic inducer may play a critical role in the regulation of mouse development.