The Cdc25 cell cycle regulator is a member of the dual-specificity class of protein-tyrosine phosphatases that hydrolyze phosphotyrosine- and phosphothreonine-containing substrates. To study the mechanism of Cdc25B, we have overexpressed and purified the catalytic domain of human Cdc25B (Xu, X., and Burke, S. P. (1996) J. Biol. Chem. 271, 5118-5124). In the present work, we have analyzed the kinetic properties of the Cdc25B catalytic domain using the artificial substrate 3-O-methylfluorescein phosphate (OMFP). Steady-state kinetic analysis indicated that the kcat/Km for OMFP hydrolysis is almost 3 orders of magnitude greater than that for p-nitrophenyl phosphate hydrolysis. Like other dual-specificity phosphatases, Cdc25 exhibits a two-step catalytic mechanism, characterized by formation and breakdown of a phosphoenzyme intermediate. Pre-steady-state kinetic analysis of OMFP hydrolysis indicated that formation of the phosphoenzyme intermediate is approximately 20 times faster than subsequent phosphoenzyme breakdown. The resulting burst pattern of product formation allowed us to derive rate constants for enzyme phosphorylation (26 s-1) and dephosphorylation (1.5 s-1) as well as the dissociation constant for OMFP (0.3 mM). Calculations suggest that OMFP binds with higher affinity and reacts faster with Cdc25B than does p-nitrophenyl phosphate. OMFP is a highly efficient substrate for the dual-specificity protein-tyrosine phosphatases VHR and rVH6, but not for two protein-tyrosine phosphatases, PTP1 and YOP. The ability to observe distinct phases of the reaction mechanism during OMFP hydrolysis will facilitate future analysis of critical catalytic residues in Cdc25 and other dual-specificity phosphatases.