The present study examines the role of a neuron-specific tyrosine phosphatase (STEP, striatal-enriched tyrosine phosphatase) in excitotoxic cell death. Our findings demonstrate that p38 MAPK, a stress-activated kinase that is known to play a role in the etiology of excitotoxic cell death is a substrate of STEP. Glutamate-mediated NMDA receptor stimulation leads to rapid but transient activation of p38 MAPK, which is primarily dependent on NR2A-NMDA receptor activation. Conversely, activation of NR2B-NMDA receptors leads to dephosphorylation and subsequent activation of STEP, which in turn leads to inactivation of p38 MAPK. Thus, during transient NMDA receptor stimulation, increases in STEP activity appears to limit the duration of activation of p38 MAPK and improves neuronal survival. However, if NR2B-NMDA receptor stimulation is sustained, protective effects of STEP activation are lost, as these stimuli cause significant degradation of active STEP, leading to secondary activation of p38 MAPK. Consistent with this observation, a cell transducible TAT-STEP peptide that constitutively binds to p38 MAPK attenuated neuronal cell death caused by sustained NMDA receptor stimulation. The findings imply that the activation and levels of STEP are dependent on the duration and magnitude of NR2B-NMDA receptor stimulation and STEP serves as a modulator of NMDA receptor dependent neuronal injury, through its regulation of p38 MAPK.