In search for a new anticancer drug target, we explored genes involved in colon adenocarcinoma development through dysregulation of a signal transduction pathway. By using the gene expression profile database, we found protein phosphatase 1H (PPM1H), belonging to the protein phosphatase 2C (PP2C) family, upregulated in colon adenocarcinomas compared with normal colon tissues. RT-PCR analysis verified the elevated level of PPM1H expression in colon cancer cell lines relative to a normal colon cell line. PPM1H encodes a protein with a molecular mass of approximately 50 kDa that resides in the cytoplasm. PPM1H fused with maltose-binding protein expressed in E. coli exhibited phosphatase activity characteristic of the PP2C family. Co-immunoprecipitation coupled with mass spectrometry analysis identified CSE1L, a proliferation and apoptosis-related protein, as a PPM1H-interacting protein. Native, but not inactive, PPM1H expressed in HeLa cells increased the mobility of CSE1L on SDS gels and a similar mobility shift was observed for purified CSE1L after treatment with PPM1H in vitro, supporting the notion that CSE1L is a substrate of PPM1H. Dominant negative PPM1H protected HeLa cells from cell death triggered by staurosporine or taxol. Additionally, knockdown of PPM1H expression with small interfering RNAs suppressed the growth of MCF-7 cells weakly but consistently. PPM1H controls cell cycle and proliferation of cancer cells potentially through dephosphorylation of CSE1L and might be a new target of anticancer drugs.