Cdc14 phosphatases are related structurally and mechanistically to protein tyrosine phosphatases (PTPs) but evolved a unique specificity for phosphoSer-Pro-X-Lys/Arg sites primarily deposited by cyclin-dependent kinases. This specialization is widely conserved in eukaryotes. The evolutionary reconfiguration of the Cdc14 active site to selectively accommodate phosphoSer-Pro likely required modification to the canonical PTP catalytic cycle. While studying Saccharomyces cerevisiae Cdc14, we discovered a short sequence in the disordered C terminus, distal to the catalytic domain, which mimics an optimal substrate. Kinetic analyses demonstrated this pseudosubstrate binds the active site and strongly stimulates rate-limiting phosphoenzyme hydrolysis, and we named it "substrate-like catalytic enhancer" (SLiCE). The SLiCE motif is found in all Dikarya fungal Cdc14 orthologs and contains an invariant glutamine, which we propose is positioned via substrate-like contacts to assist orientation of the hydrolytic water, similar to a conserved active site glutamine in other PTPs that Cdc14 lacks. AlphaFold2 predictions revealed vertebrate Cdc14 orthologs contain a conserved C-terminal alpha helix bound to the active site. Although apparently unrelated to the fungal sequence, this motif also makes substrate-like contacts and has an invariant glutamine in the catalytic pocket. Altering these residues in human Cdc14A and Cdc14B demonstrated that it functions by the same mechanism as the fungal motif. However, the fungal and vertebrate SLiCE motifs were not functionally interchangeable, illuminating potential active site differences during catalysis. Finally, we show that the fungal SLiCE motif is a target for phosphoregulation of Cdc14 activity. Our study uncovered evolution of an unusual stimulatory pseudosubstrate motif in Cdc14 phosphatases.