The cystic fibrosis transmembrane conductance regulator (CFTR) chloride channel is tightly regulated by the opposing actions of protein kinases and phosphatases. Its phosphorylation and activation by protein kinases A (PKA) and C (PKC) have been studied in some detail but phosphatase regulation of the channel has received less attention. Several phosphatases may control CFTR in various cell types, however in epithelia most deactivation is mediated by a membrane-bound phosphatase with functional properties resembling those of PP2C, the prototypic member of the PPM gene family of serinelthreonine phosphatases. The PP2C-like phosphatase requires Mg2+, is insensitive to the inhibitors okadaic acid and calyculin A, does not require Ca2+ or calmodulin, and is inhibited non-specifically by phenylimidazothiazoles. It is closely associated with CFTR and can be co-immunoprecipitated or co-purified from celllysates by affinity chromatography with, or without, pretreatment with chemical crosslinking reagents. Current efforts are directed towards identifying the phosphatase at the molecular level; i.e., determining if it is a novel isoform or alternatively spliced variant of a known PP2C isoform, or a new membrane-targeted phosphatase in the PPM family. Identifying and characterizing the phosphatase will open many new avenues of investigation into basic aspects of CFTR regulation, and may have clinical significance since the phosphatase is a potential target for pharmacotherapies to treat cystic fibrosis and secretory diarrhea.