We have cloned a novel cDNA from human skeletal muscle which encodes a protein phosphatase with a unique acidic domain. It is 34% identical to mammalian PP2C alpha and PP2C beta and we call it PP2C gamma. It more closely resembles PP2Cs from Paramecium tetraurelia and Schizosaccharomyces pombe than mammalian PP2Cs. Northern blot analysis shows that PP2C gamma is widely expressed, and is most abundant in testis, skeletal muscle, and heart. Like known PP2Cs, recombinant PP2C gamma requires Mg2+ or Mn2+ for activity. Unlike any other known phosphatase, PP2C gamma has a highly acidic domain: 75% of the 54 residues are glutamate or aspartate.