We have cloned a gene from Plasmodium falciparum with homology to the Mg2+-dependent serine/threonine protein phosphatase 2C (PP2C) family. The predicted coding region is 920 amino acids long, twice the size of other members of this family. We show that this protein can be divided into two halves (Pf2C-1 and Pf2C-2), each a complete phosphatase unit with homology to other phosphatases of this class. To study the function of this PP2C, we have tested the ability of different constructs to complement conditional null mutants of yeast. Our results show that expression of the full-length protein, the first half alone, the second half alone, or a hybrid with the N terminus of the first half and the C terminus of the second half was able to complement the heat shock response defect of a Schizosaccharomyces pombe strain with a PP2C (PTC1) deletion. Recombinant P. falciparum PP2C expressed in Escherichia coli was active in dephosphorylating 32P-labeled casein in an Mg2+- or Mn2+-dependent reaction. Each half alone was also active in recombinant form. Using the two-hybrid system, we have shown that the two halves can interact. Gel filtration assay of P. falciparum protein extracts suggests that full-length PfPP2C is a dimer, and phosphatase activity competition experiments indicate that dimerization of PfPP2C is required for its optimal activity. This unusual phosphatase molecule appears to be composed of four catalytic units on two polypeptide chains.