The spo0E locus of Bacillus subtilis codes for a negative regulator of sporulation that, when overproduced, represses sporulation and, if deleted, results in inappropriate timing of sporulation. The product of this locus, Spo0E, was purified and found to be a protein phosphatase, which specifically dephosphorylated the sporulation transcription factor Spo0A-P, converting it to an inactive form. Spo0E was not significantly active as a phosphatase on other components of the phosphorelay signal-transduction pathway producing Spo0A-P. A mutant Spo0E protein that results in sporulation deficiency was purified and found to be hyperactive as a phosphatase. The Spo0E phosphatase may provide an additional control point for environmental, metabolic, or cell-cycle regulation of phosphate flow in the phosphorelay. These results reinforce the concept that the phosphorelay is subject to a host of positive and negative signals for sporulation that are recognized and interpreted as signal integration circuit that has the role of regulating the cellular level of active phosphorylated Spo0A sporulation transcription factor.