The gene ptc4+ encodes one of four type 2C protein phosphatases (PP2C) in the fission yeast Schizosaccharomyces pombe. Deletion of ptc4+ is not lethal; however, Deltaptc4 cells grow slowly in defined minimal medium and undergo premature growth arrest in response to nitrogen starvation. Interestingly, Deltaptc4 cells are unable to fuse vacuoles in response to hypotonic stress or nutrient starvation. Conversely, Ptc4 overexpression appears to induce vacuole fusion. These findings reveal a hitherto unrecognized function of type 2C protein phosphatases: regulation of vacuole fusion. Ptc4 localizes in vacuole membranes, which suggests that Ptc4 regulates vacuole fusion by dephosphorylation of one or more proteins in the vacuole membrane. Vacuole function is required for the process of autophagy that is induced by nutrient starvation; thus, the vacuole defect of Deltaptc4 cells might explain why these cells undergo premature growth arrest in response to nitrogen starvation.