Mitogen-activated protein (MAP) kinase phosphatase 1 (MKP-1/CL100) is an inducible nuclear dual specificity protein phosphatase that can dephosphorylate and inactivate both mitogen- and stress-activated protein kinases in vitro and in vivo. However, the molecular mechanism responsible for the substrate selectivity of MKP-1 is unknown. In addition, it has been suggested that the signal transducers and activators of transcription 1 (STAT1) transcription factor is a physiological non-MAP kinase substrate for MKP-1. We have used the yeast two-hybrid assay to demonstrate that MKP-1 is able to interact selectively with the extracellular signal-regulated kinase 1/2 (ERK1/2), p38alpha, and c-Jun NH(2)-terminal kinase (JNK) MAP kinase isoforms. Furthermore, this binding is accompanied by catalytic activation of recombinant MKP-1 protein in vitro, and these end points show an absolute correlation with MKP-1 substrate selectivity in vivo. In contrast, MKP-1 does not interact with STAT1. Recombinant STAT1 does not cause catalytic activation of MKP-1; nor does MKP-1 block tyrosine phosphorylation of STAT1 in vivo. Both binding and catalytic activation of MKP-1 are abrogated by mutation of a conserved docking site in ERK2, p38alpha, and JNK1 MAP kinases. Within MKP-1, MAP kinase binding is mediated by the amino-terminal noncatalytic domain of the protein. However, mutation of a conserved cluster of positively charged residues within this domain abolishes the binding and activation of MKP-1 by ERK2 and p38alpha but not JNK1, indicating that there are distinct binding determinants for these MAP kinase isoforms. We conclude that the substrate selectivity of MKP-1 is determined by specific protein-protein interactions coupled with catalytic activation of the phosphatase and that these interactions are restricted to members of the MAP kinase family of enzymes.