A potent inhibitor of a dual-specificity protein phosphatase, VHR (vaccinia H1 related), was isolated during a screening of microbial metabolites. This inhibitor was identified as 4-isoavenaciolide (4-iA), and was determined to irreversibly inhibit VHR phosphatase activity with a 50% inhibitory concentration of 1.2 microM. Detailed tandem mass spectrometry analyses of proteolysed fragments revealed that two molecules of 4-iA bound a molecule of VHR at the two different fragments: one containing the catalytic domain and the other containing the alpha6 helix positioned surface domain. As 4-iA possesses a reactive exo-methylene moiety, it is possible that 4-iA inhibits VHR through the direct binding to the cysteine residue in the catalytic site (Cys124). Furthermore, 4-iA inhibited dual-specificity protein phosphatases and tyrosine phosphatases, but did not inhibit serine/threonine phosphatases. These results suggest that 4-iA is a cysteine-targeting inhibitor of protein phosphatases with a common HCX5RS/T motif in the catalytic site.