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Bacteriophage lambda phosphoprotein phosphatase (lambdaPP) has structural similarity to the mammalian Ser/Thr phosphoprotein phosphatases (PPPs) including the immunosuppressant drug target calcineurin. PPPs possess a conserved active site containing a dinuclear metal cluster, with metal ligands provided by a phosphoesterase motif plus two additional histidine residues at the C-terminus. Multiple sequence alignment of lambdaPP with 28 eubacterial and archeal phosphoesterases identified active site residues from the phosphoesterase motif and in many cases 2 additional C-terminal His metal ligands. Most highly similar to lambdaPP are E. coli PrpA and PrpB. Using the crystal structure of lambdaPP [Voegtli, W. C., et al. (2000) Biochemistry 39, 15365-15374] as a structural and active site model for PPPs and related bacterial phosphoesterases, we have studied mutant forms of lambdaPP reconstituted with Mn(2+) by electron paramagnetic resonance (EPR) spectroscopy, Mn(2+) binding analysis, and phosphatase kinetics. Analysis of Mn(2+)-bound active site mutant lambdaPP proteins shows that H22N, N75H, and H186N mutations decrease phosphatase activity but still allow mononuclear Mn(2+) and [(Mn(2+))(2)] binding. The high affinity Mn(2+) binding site is shown to consist of M2 site ligands H186 and Asn75, but not H22 from the M1 site which is ascribed as the lower affinity site.