Type 2A protein phosphatase (PP2A) comprises a diverse family of phosphoserine- and phosphothreonine-specific enzymes ubiquitously expressed in eukaryotic cells. Common to all forms of PP2A is a catalytic subunit (PP2Ac) which can form two distinct complexes, one with a structural subunit termed PR65/A and another with an alpha4 protein. The PR65/A-PP2Ac dimer may further associate with a regulatory subunit and form a trimeric holoenzyme. To date, three distinct families of regulatory subunits, which control substrate selectivity and phosphatase activity and target PP2A holoenzymes to their substrates, have been identified. Other molecular mechanisms that regulate PP2Ac function include phosphorylation, carboxyl methylation, inhibition by intracellular protein inhibitors (I(1)(PP2A) and I(2)(PP2A)), and stimulation by ceramide. PP2A dephosphorylates many proteins in vitro, but in vivo protein kinases and transcription factors appear to represent two major sets of substrates. Several natural compounds can inhibit PP2A activity and are used to study its function. Mutations in genes encoding PR65/A subunits have been identified in several different human cancers and the PP2A inhibitor, termed fostriecin, is being tested as an anticancer drug. Thus, a more thorough understanding of PP2A structure and function may lead to the development of novel strategies against human diseases.