In bacteria, signaling phosphorylation is thought to occur primarily on His and Asp residues. However, phosphoproteomic surveys over the past decade in phylogenetically diverse bacteria have identified numerous proteins that are phosphorylated on Ser and/or Thr residues. Consistently, genes encoding Ser/Thr kinases are present in many bacterial genomes, such as that of Escherichia coli, which encodes at least three Ser/Thr kinases. Since Ser/Thr phosphorylation is a stable modification, a dedicated phosphatase is necessary to allow reversible regulation. Ser/Thr phosphatases belonging to several conserved families are found in bacteria. One family of particular interest are Ser/Thr phosphatases, which have extensive sequence and structural homology to eukaryotic Ser/Thr protein phosphatase 2C (PP2C) phosphatases. These proteins, called eukaryote-like Ser/Thr phosphatases (eSTPs), have been identified in a number of bacteria but not in E. coli Here, we describe a previously unknown eSTP encoded by an E. coli open reading frame (ORF), yegK, and characterize its biochemical properties, including its kinetics, substrate specificity, and sensitivity to known phosphatase inhibitors. We investigate differences in the activity of this protein in closely related E. coli strains. Finally, we demonstrate that this eSTP acts to dephosphorylate a novel Ser/Thr kinase that is encoded in the same operon.IMPORTANCE Regulatory protein phosphorylation is a conserved mechanism of signaling in all biological systems. Recent phosphoproteomic analyses of phylogenetically diverse bacteria, including the model Gram-negative bacterium Escherichia coli, demonstrate that many proteins are phosphorylated on serine or threonine residues. In contrast to phosphorylation on histidine or aspartate residues, phosphorylation of serine and threonine residues is stable and requires the action of a partner Ser/Thr phosphatase to remove the modification. Although a number of Ser/Thr kinases have been reported in E. coli, no partner Ser/Thr phosphatases have been identified. Here, we biochemically characterize a novel Ser/Thr phosphatase that acts to dephosphorylate a Ser/Thr kinase that is encoded in the same operon.