Phosphatase plays a crucial role in determining cellular fate by inactivating its substrate kinase, but it is not known whether a kinase can vice versa phosphorylate its phosphatase to execute this function. Protein-tyrosine phosphatase H1 (PTPH1) is a specific phosphatase of p38γ mitogen-activated protein kinase (MAPK) through PDZ binding, and here, we show that p38γ is also a PTPH1 kinase through which it executes its oncogenic activity and regulates stress response. PTPH1 was identified as a substrate of p38γ by unbiased proteomic analysis, and its resultant phosphorylation at Ser-459 occurs in vitro and in vivo through their complex formation. Genetic and pharmacological analyses showed further that Ser-459 phosphorylation is directly regulated by Ras signaling and is important for Ras, p38γ, and PTPH1 oncogenic activity. Moreover, experiments with physiological stimuli revealed a novel stress pathway from p38γ to PTPH1/Ser-459 phosphorylation in regulating cell growth and cell death by a mechanism dependent on cellular environments but independent of canonical MAPK activities. These results thus reveal a new mechanism by which a MAPK regulates Ras oncogenesis and stress response through directly phosphorylating its phosphatase.