Although it is well established that a transient activation of the mitogen-activated protein kinases Erk and Jnk is a crucial step in most growth promoting signaling pathways, it has also been demonstrated that a prolonged activation of these kinases can induce differentiation, cell cycle arrest, and cell senescence. We recently found that the expression of the 21-kDa human Vaccinia H1-related (VHR) dual-specific phosphatase fluctuates during cell cycle progression and affects Erk and Jnk activity in a cell cycle-dependent manner. Cells lacking VHR arrested at the G1/S and G2/M transitions of the cell cycle and exhibited senescence phenotypes. Cells lacking VHR upregulated p21Cip/Waf1 and downregulated many genes for cell cycle regulators, DNA replication, transcription, and mRNA processing. In the absence of VHR, the serum-induced activation of Jnk and Erk was further elevated and was required for the G1/S and G2/M blocks, which were attenuated upon Jnk and Erk inhibition. Collectively, VHR provides a long sought layer in the regulation of Jnk and Erk during cell cycle progression thereby contributing to cell cycle arrest, differentiation or senescence.