Recurrent chromosome 12p deletions are associated with distinct tumor types and suggest the presence of a tumor suppressor gene (TSG). Previously, we mapped an EST with similarity to a protein tyrosine phosphatase to the minimally deleted region for all these neoplasms. The corresponding gene, DUSP16/MKP-7, was recently shown to code for a mitogen-activated protein kinase phosphatase, suggestive for a function as tumor suppressor. Overexpression of DUSP16 in BCR-ABL-transformed Rat-1 fibroblasts reduces their transforming capacity in vitro and in vivo via downregulation of BCR-ABL-induced JNK activation. A role for DUSP16 as a regulator of JNK signaling was further demonstrated via overexpression in Ba/F3 cells, which increased their antiapoptosis. However, no inactivating mutations could be detected in leukemia patients hemizygous for DUSP16, and the effect of hemizygosity on DUSP16 expression level could not be assessed due to the variability of DUSP16 transcript levels observed in leukaemia cell lines and in patients. Taken together, the functional data point to a context-dependent role for DUSP16 on cell transformation and apoptosis, reflecting the dual role of JNK, and therefore suggest that DUSP16 might be haploinsufficient for tumor suppression.