In fission yeast, the stress-activated MAP kinase, Sty1, is activated via phosphorylation upon exposure to stress and orchestrates an appropriate response. Its activity is attenuated by either serine/threonine PP2C or tyrosine phosphatases. Here, we found that the PP2C phosphatase, Ptc4, plays an important role in inactivating Sty1 specifically upon oxidative stress. Sty1 activity remains high in a ptc4 deletion mutant upon H(2)O(2) but not under other types of stress. Surprisingly, Ptc4 localizes to the mitochondria and is targeted there by an N-terminal mitochondrial targeting sequence (MTS), which is cleaved upon import. A fraction of Sty1 also localizes to the mitochondria suggesting that Ptc4 attenuates the activity of a mitochondrial pool of this MAPK. Cleavage of the Ptc4 MTS is greatly reduced specifically upon H(2)O(2), resulting in the full-length form of the phosphatase; this displays a stronger interaction with Sty1, thus suggesting a novel mechanism by which the negative regulation of MAPK signalling is controlled and providing an explanation for the oxidative stress-specific nature of the regulation of Sty1 by Ptc4.