Amino acid residues that are important for metal binding and catalysis in Gram-positive phosphotyrosine phosphatases were identified in the Wzh protein of Streptococcus thermophilus MR-1C by using sequence comparisons. A His-tagged fusion Wzh protein was purified from Escherichia coli cultures and tested for phosphatase activity against synthetic phosphotyrosine and phosphoserine–threonine peptides. Purified Wzh released 2316.5 ± 138.7 pmol PO4·min−1·μg−1 from phosphotyrosine peptide-1 and 2345.7 ± 135.2 pmol PO4·min−1·μg−1 from phosphotyrosine peptide-2. The presence of the phosphotyrosine phosphatase inhibitor sodium vanadate decreased purified Wzh activity by 45%–50% at 1 mmol·L–1, 74%–84% at 5 mmol·L–1, and by at least 88% at 10 mmol·L–1. Purified Wzh had no detectable activity against the phosphoserine–threonine peptide. These results clearly establish that S. thermophilus MR-1C Wzh functions as a phosphotyrosine phosphatase that could function to remove phosphate groups from proteins involved in exopolysaccharide biosynthesis, including the protein tyrosine kinase Wze and priming glycosyltransferase.