Dual-specificity protein phosphatases are a subclass of protein tyrosine phosphatases that are uniquely able to hydrolyse the phosphate ester bond on both a tyrosine and a threonine or serine residue on the same protein. Dual-specificity phosphatases have a central role in the complex regulation of signalling pathways that are involved in cell stress responses, proliferation and death. Although this enzyme family is increasingly the target of drug discovery efforts in pharmaceutical companies, a summary of the salient developments in the biology and medicinal chemistry of dual-specificity phosphatases has been lacking. We hope that this comprehensive overview will stimulate further progress in the development of small-molecule inhibitors that could form the basis for a new class of target-directed therapeutic agents.