Lipid phosphates initiate key signaling cascades in cell activation. Lysophosphatidate (LPA) and sphingosine 1-phosphate (S1P) are produced by activated platelets. LPA is also formed from circulating lysophosphatidylcholine by autotaxin, a protein involved tumor progression and metastasis. Extracellular LPA and S1P stimulate families of G-protein coupled receptors that elicit diverse responses. LPA is involved in wound repair and tumor growth. Exogenous S1P is a potent stimulator of angiogenesis, a process vital in development, tissue repair and the growth of aggressive tumors. Inside the cell, phosphatidate (PA), ceramide 1-phosphate (C1P), LPA, and S1P act as signaling molecules with distinct functions including the stimulation of cell division, cytoskeletal rearrangement, Ca(2+) transients, and membrane movement. These observations imply that phosphatases that degrade lipid phosphates on the cell surface, or inside the cell, regulate cell signaling under physiological and pathological conditions. This occurs through attenuation of signaling by the lipid phosphates and by the production of bioactive products (diacylglycerol, ceramide, and sphingosine). Three lipid phosphate phosphatases (LPPs) and a splice variant dephosphorylate LPA, PA, CIP, and S1P. Two S1P phosphatases (SPPs) act specifically on S1P. In addition, there is family of four LPP-related proteins (LPRs, or plasticity-related genes, PRGs). PRG-1 expression in neurons has been reported to increase extracellular LPA breakdown and attenuate LPA-induced axonal retraction. It is unclear whether the LRPs dephosphorylate LPA directly, stimulate LPP activity, or bind LPA and S1P. Also, the importance of extra- versus intra-cellular actions of the LPPs and SPPs, and the individual roles of different isoforms is not firmly established. Understanding the functions and regulation of the LPPs, SPPs and related proteins will hopefully contribute to interventions to correct dysfunctions in conditions such as wound repair, inflammation, angiogenesis, tumor growth, and metastasis.