To understand the role of the type 2A-like protein phosphatase in the cell division cycle, we investigated the mutant phenotypes obtained when the fission yeast ppa1+ and ppa2+ phosphatase genes (which encode polypeptides with approximately 80% identity to mammalian type 2A phosphatases) were either deleted or overexpressed. We also investigated the in vivo effect of okadaic acid, an inhibitor of protein serine/threonine phosphatases, on cell division. We show that ppa2+ interacts genetically with the cell cell regulators cdc25+ and wee1+, as a ppa2 deletion is lethal when combined with wee1-50 but partially suppresses the conditional lethality of cdc25-22 mutation. Evidence that ppa2+ negatively controls the entry into mitosis, possibly through the regulation of cdc2 tyrosine phosphorylation, is presented. ppa2 phosphatase is abundant in the cytoplasm, in contrast to the type 1-like phosphatase dis2, which is enriched in the nucleus. Overproduced ppa1 or ppa2 proteins accumulate in the cytoplasm near the nuclear periphery, and cells arrest in interphase. Okadaic acid-treated cells, like a ppa2 deletion, are short in length and display protein hyperphosphorylation. Cytokinesis is also inhibited, producing binucleated cells. We show that ppa2 is the genetic locus controlling okadaic acid sensitivity. The ppa2 deletion reveals the same hyperphosphorylated proteins as okadaic acid. When a strain deleted for ppa2 is treated with okadaic acid, cell size is reduced further to that of wee1-50 mutant strain or overexpressing the cdc25+ gene product, suggesting functional relationship of ppa2 with the cdc25 tyrosine phosphatase and/or the wee1 kinase in cell cycle control.