The biochemical and biological properties of a novel neuroendocrine-associated phosphatase (NEAP) were characterized. NEAP had a sequence characteristic of a dual-specificity phosphatase (DSP), and was preferentially expressed in neuroendocrine cells/tissues as well as in skeletal muscle and heart. Expression of NEAP was up-regulated in nerve growth factor (NGF)-treated, differentiated PC12 cells. NEAP was cytosolic and did not apparently have effects against extracellular signal-regulated kinase, c-Jun N-terminal kinase (JNK) and p38 mitogen-activated protein kinase activated by various stimuli. Although NEAP and MAPK phosphatase (MPK)-1 showed similar phosphatase activity towards p-nitro phenylphosphate (pNPP), in contrast to MKP-1, NEAP did not dephosphorylate JNK and p38-MAPK in vitro. Overexpression of NEAP, but not the C152S mutant, in PC12 cells suppressed NGF-induced phosphorylation of the p85 subunit of phosphatidylinositol 3-kinase (PI3K) and Akt activation. Overexpression of NEAP also suppressed neurite outgrowth induced by NGF and sensitized PC12 cells to cisplatin-induced apoptosis. Suppression of NEAP by RNA interference enhanced NGF-induced neurite outgrowth and Akt activation. Our results indicated that, unlike other DSPs, down-regulation of conventional MAPKs was not the major function of NEAP. Furthermore, NEAP might be involved in neuronal differentiation via regulation of the PI3K/Akt signaling.