The activation of signal transduction pathways by extracellular stimul
i, such as growth factors or hormones, ultimately results in changes i
n the expression of specific genes. The altered pattern of expression
eventually determines the resulting cellular consequences, e.g. cell g
rowth, division, or differentiation. It has been well established that
the reversible phosphorylation of proteins is a major regulatory mech
anism in these processes. However, while much has been learned about t
he role of kinases, the involvement of protein phosphatases is less cl
ear and has only recently begun to be investigated in more detail. Thi
s review will present some of the new findings that demonstrate a cruc
ial regulatory function of serine/threonine protein phosphatases (PPas
es) in gene regulatory processes.