The human pregnane X receptor (hPXR) regulates the expression of CYP3A4, which plays a vital role in hepatic drug metabolism and has considerably reduced expression levels in proliferating hepatocytes. We have recently shown that cyclin-dependent kinase 2 (CDK2) negatively regulates hPXR-mediated CYP3A4 gene expression. CDK2 can be dephosphorylated and inactivated by protein phosphatase type 2C beta isoform long (PP2Cbetal), a unique phosphatase that was originally cloned from human liver. In this study, we sought to determine whether PP2Cbetal is involved in regulating hPXR's transactivation activity and whether PP2Cbetal affects CDK2 regulation of this activity in HepG2 liver carcinoma cells. In transactivation assays, transiently coexpressed PP2Cbetal significantly enhanced the hPXR-mediated CYP3A4 promoter activity and decreased the inhibitory effect of CDK2 on hPXR transactivation activity. In addition, shRNA-mediated down-regulation of endogenous PP2Cbetal promoted cell proliferation, inhibited the interaction of hPXR with steroid receptor coactivator-1, and attenuated the hPXR transcriptional activity. The levels of PP2Cbetal did not affect hPXR expression. Our results show for the first time that PP2Cbetal is essential for hPXR activity and can positively regulate this activity by counteracting the inhibitory effect of CDK2. Our results implicate a novel and important role for PP2Cbetal in regulating hPXR activity and CYP3A4 expression by inhibiting or desensitizing signaling pathways that negatively regulate the function of pregnane X receptor in liver cells and are consistent with the notion that both the activity of hPXR and the expression of CYP3A4 are regulated in a cell cycle-dependent and cell proliferation-dependent manner.