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The role of protein phosphatases in pathogenic bacteria has been studied extensively over the last two decades. Ser/Thr and Tyr phosphatases are associated with growth and virulence of many bacteria. These phosphatases control kinase-mediated functions and return the proteins to their unmodified state. Biochemical, structural, and functional studies, in addition to extensive genetic characterization, have highlighted the importance of phosphatases in bacteria. However, questions remain regarding the mechanisms driving localization of secretory phosphatases to cellular compartments, identification of receptor phosphatase sensory signals, and a possible role of cofactors and ligands in their functions. This review focuses on the role of Ser/Thr- and Tyr-specific phosphatases present in pathogenic bacteria, with an emphasis on the regulation of basic cellular processes and virulence. Furthermore, we highlight their clinical importance and analyze the development of drugs targeting protein phosphatases.