The gene pzl‐1 from the filamentous fungus Neurospora crassa encodes a putative Ser/Thr protein phosphatase that is reminiscent of the Ppz1/Ppz2 and Pzh1 phosphatases from Saccharomyces cerevisiae and Schizosaccharomyces pombe, respectively. The entire PZL‐1 protein, as well as its carboxyl‐terminal domain, have been expressed in Escherichia coli as active protein phosphatases. To characterize its cellular role, PZL‐1 was also expressed in Sz. pombe and in S. cerevisiae. Expression of PZL‐1 in S. cerevisiae from the PPZ1 promoter was able to rescue the altered sensitivity to caffeine and lithium ions of a ppz1 strain. Furthermore, high copy number expression of PZL‐1 alleviated the lytic phenotype of a S. cerevisiae slt2/mpk1 mitogen‐activated protein (MAP) kinase mutant, similarly to that described for PPZ1, and mimicked the effects of high levels of Ppz1 on cell growth. Expression of PZL‐1 in fission yeast from a weak version of the nmt1 promoter fully rescued the growth defect of a pzh1Δ strain in high potassium, but only partially complemented the sodium‐hypertolerant phenotype. Strong overexpression of the N. crassa phosphatase in Sz. pombe affected cell growth and morphology. Therefore, PZL‐1 appears to fulfil every known function carried out by its S. cerevisiae counterpart, despite the marked divergence in sequence within their NH2‐terminal moieties. Copyright © 2000 John Wiley & Sons, Ltd.