Myotubularin-related proteins are a large subfamily of protein tyrosine phosphatases (PTPs) that dephosphorylate D3-phosphorylated inositol lipids. Mutations in members of the myotubularin family cause the human neuromuscular disorders myotubular myopathy and type 4B Charcot-Marie-Tooth syndrome. The crystal structure of a representative member of this family, MTMR2, reveals a phosphatase domain that is structurally unique among PTPs. A series of mutants are described that exhibit altered enzymatic activity and provide insight into the specificity of myotubularin phosphatases toward phosphoinositide substrates. The structure also reveals that the GRAM domain, found in myotubularin family phosphatases and predicted to occur in ∼180 proteins, is part of a larger motif with a pleckstrin homology (PH) domain fold. Finally, the MTMR2 structure will serve as a model for other members of the myotubularin family and provide a framework for understanding the mechanism whereby mutations in these proteins lead to disease.