The Drosophila retinal degeneration C (rdgC) gene encodes an unusual protein serine/threonine phosphatase in that it contains at least two EF-hand motifs at its carboxy terminus. By a combination of large-scale sequencing of human retina cDNA clones and searches of expressed sequence tag and genomic DNA databases, we have identified two sequences in mammals [Protein Phosphatase with EF-hands-1 and 2 (PPEF-1 and PPEF-2)] and one in Caenorhabditis elegans (PPEF) that closely resemble rdgC. In the adult, PPEF-2 is expressed specifically in retinal rod photoreceptors and the pineal. In the retina, several isoforms of PPEF-2 are predicted to arise from differential splicing. The isoform that most closely resembles rdgC is localized to rod inner segments. Together with the recently described localization of PPEF-1 transcripts to primary somatosensory neurons and inner ear cells in the developing mouse, these data suggest that the PPEF family of protein serine/threonine phosphatases plays a specific and conserved role in diverse sensory neurons.