The wild-type p53-induced phosphatase PPM1D (or Wip1) is a serine/threonine phosphatase that is transcriptionally upregulated by p53 following ultraviolet and ionizing radiation. PPM1D is an oncogene in transformation assays and is amplified or overexpressed in several human tumor types. Here, we demonstrate that PPM1D interacts with the nuclear isoform of uracil DNA glycosylase, UNG2, and suppresses base excision repair (BER). Point mutations that inactivate PPM1D phosphatase activity abrogate BER suppression, indicating that dephosphorylation by PPM1D is important for BER inhibition. We have identified UNG2 phosphorylation sites at threonines 6 and 126 that exhibit enhanced phosphorylation following UV irradiation. The UV-induced phosphorylated forms of UNG2 are more active than nonphosphorylated forms in mediating uracil-associated DNA cleavage. PPM1D dephosphorylation of UNG2 at phosphothreonine 6 is associated with reduced UNG2 activity. Thus, PPM1D may inhibit BER by dephosphorylating UNG2 to facilitate its inactivation after completion of DNA repair.