Reversible phosphorylation of RNA polymerase (RNAP) II's largest subunit C-terminal domain (CTD) is a key event during mRNA metabolism. The CTD phosphatase, FCP1, catalyzes the dephosphorylation of RNAP II and is thought to play a major role in polymerase recycling. In this study, we isolated a novel phosphatase gene by large-scale sequencing analysis of a human fetal brain cDNA library. Its cDNA is 2215 bp in length, encoding a 318-amino acid polypeptide that contains a ubiquitin-like domain and a CTD phosphatase domain. Therefore, it was termed ubiquitin-like domain containing CTD phosphatase 1 (UBLCP1). Reverse transcription PCR (RT-PCR) revealed that UBLCP1 was expressed with relatively lower levels in most adult normal tissues and higher levels in fast growing or tumor tissues. Transient transfection experiment suggested that UBLCP1 was localized in the nucleus of COS-7 cells. Significantly, UBLCP1 could dephosphorylate GST-CTD in vitro. Accordingly, UBLCP1 may play a role in the regulation of phosphorylation state of RNA polymerase II C-terminal domain.