The anti-oncogenic Chk2 kinase plays a crucial role in DNA damage-induced cell cycle checkpoint regulation. Recently, we have shown that Chk2 associates with the oncogenic Wip1 (PPM1D) phosphatase and that Wip1 acts as a negative regulator of Chk2 during DNA damage response by dephosphorylating phosphorylated Thr-68 in activated Chk2 (Fujimoto, H., Onishi, N., Kato, N., Takekawa, M., Xu, X. Z., Kosugi, A., Kondo, T., Imamura, M., Oishi, I., Yoda, A., and Minami, Y. (2006) Cell Death Differ. 13, 1170-1180). Here, we performed structure-function analyses of Chk2 and Wip1 by using a series of deletion or amino acid-substituted mutant proteins of Chk2 and Wip1. We show that nuclear localization of both Chk2 and Wip1 is required for their association in cultured cells and that the serine-glutamine (SQ)/threonine-glutamine (TQ) domain of Chk2, containing Thr-68, and the N-terminal domain of Wip1, comprising about 100 amino acids, are necessary and sufficient for the association of both molecules. However, it was found that an intrinsic kinase activity of Chk2, but not phosphatase activity of Wip1, is required for the association of fulllength Chk2 and Wip1. Interestingly, we also show that the mutant Wip1 proteins, bearing the N-terminal domain of Wip1 alone or lacking an intrinsic phosphatase activity, exhibit dominant negative effects on the functions of the wild-type Wip1, i.e. ectopic expression of either of these Wip1 mutants inhibits dephosphorylation of Thr-68 in Chk2 by Wip1 and anti-apoptotic function of Wip1. These results provide a molecular basis for developing novel anti-cancer drugs, targeting oncogenic Wip1 phosphatase.