A number of bacterial pathogens have evolved sophisticated strategies to subvert host-cell signal-transduction pathways for their own benefit. These bacteria produce and export proteins capable of specific interactions with key mammalian cell regulatory molecules in order to derail the normal functions of the cells. In this study, we describe the identification of a modular effector protein secreted by the bacterial pathogen Salmonella typhimurium that is required for its full display of virulence. Sequence analysis revealed that a carboxy-terminal region of this protein, which we have termed SptP, is homologous to the catalytic domains of protein tyrosine phosphatases. Purified SptP protein efficiently dephosphorylated peptide substrates phosphorylated on tyrosine. An engineered mutant of SptP in which a critical Cys residue in the catalytic domain was changed to Ser was devoid of phosphatase activity, indicating a catalytic mechanism similar to that of other tyrosine phosphatases. In addition, an amino-terminal region of SptP exhibited sequence similarity to the ribosyltransferase exo-enzyme S from Pseudomonas aeruginosa and the cytotoxin YopE from Yersinia spp. The modular nature of this effector protein may allow multiple interactions with host-cell signalling functions.