MK-STYX [MAPK (mitogen-activated protein kinase) phospho-serine/threonine/tyrosine-binding protein] is a pseudophosphatase member of the dual-specificity phosphatase subfamily of the PTPs (protein tyrosine phosphatases). MK-STYX is catalytically inactive due to the absence of two amino acids from the signature motif that are essential for phosphatase activity. The nucleophilic cysteine residue and the adjacent histidine residue, which are conserved in all active dual-specificity phosphatases, are replaced by serine and phenylalanine residues respectively in MK-STYX. Mutations to introduce histidine and cysteine residues into the active site of MK-STYX generated an active phosphatase. Using MS, we identified G3BP1 [Ras-GAP (GTPase-activating protein) SH3 (Src homology 3) domain-binding protein-1], a regulator of Ras signalling, as a binding partner of MK-STYX. We observed that G3BP1 bound to native MK-STYX; however, binding to the mutant catalytically active form of MK-STYX was dramatically reduced. G3BP1 is also an RNA-binding protein with endoribonuclease activity that is recruited to ‘stress granules’ after stress stimuli. Stress granules are large subcellular structures that serve as sites of mRNA sorting, in which untranslated mRNAs accumulate. We have shown that expression of MK-STYX inhibited stress granule formation induced either by aresenite or expression of G3BP itself; however, the catalytically active mutant MK-STYX was impaired in its ability to inhibit G3BP-induced stress granule assembly. These results reveal a novel facet of the function of a member of the PTP family, illustrating a role for MK-STYX in regulating the ability of G3BP1 to integrate changes in growth-factor stimulation and environmental stress with the regulation of protein synthesis.