Activation of the c-JUN N-terminal kinase (JNK) pathway is implicated in a number of important physiological processes, from embryonic morphogenesis to cell survival and apoptosis. JNK stimulatory phosphatase 1 (JSP1) is a member of the dual-specificity phosphatase subfamily of protein tyrosine phosphatases. In contrast to other dual-specificity phosphatases that catalyze the inactivation of mitogen-activated protein kinases, expression of JSP1 activates JNK-mediated signaling. JSP1 and its relative DUSP15 are unique among members of the protein tyrosine phosphatase family in that they contain a potential myristoylation site at the N-terminus (MGNGMXK). In this study, we investigated whether JSP1 was myristoylated and examined the functional consequences of myristoylation. Using mass spectrometry, we showed that wild-type JSP1, but not a JSP1 mutant in which Gly2 was mutated to Ala (JSP1-G2A), was myristoylated in cells. Although JSP1 maintained intrinsic phosphatase activity in the absence of myristoylation, the subcellular localization of the enzyme was altered. Compared with the wild type, the ability of nonmyristoylated JSP1 to induce JNK activation and phosphorylation of the transcription factor c-JUN was attenuated. Upon expression of wild-type JSP1, a subpopulation of cells, with the highest levels of the phosphatase, was induced to float off the dish and undergo apoptosis. In contrast, cells expressing similar levels of JSP1-G2A remained attached, further highlighting that the myristoylation mutant was functionally compromised.