A novel phosphatase has been cloned and partially characterized. It has a mitochondrial leader sequence and its amino acid sequence places it in the PP2C family like two known mitochondrial phosphatases. Western blot analysis of subcellular fractions and confocal microscopy of 3T3L1 preadipocytes expressing the GFP-tagged protein confirm its mitochondrial localization. Western blot analysis indicates that the protein is expressed in several mouse tissues, with highest expression in brain, heart, liver, and kidney. The recombinant protein exhibits Mn²⁺-dependent phosphoserine phosphatase activity against the branched-chain α-keto acid dehydrogenase complex, suggesting the enzyme may play a role in regulation of branched chain amino acid catabolism. Whether there are other mitochondrial substrates for the enzyme is not known.