Although reversible phosphorylation on tyrosine residues regulates the activity of many eukaryotic proteins, there are few examples of this type of regulation in bacteria. We have identified the first essential tyrosine phosphatase homolog in a bacterium, Caulobacter crescentus CtpA. ctpA mutants with altered active-site residues are nonviable, and depletion of CtpA yields chains of cells with blebbed outer membranes, linked by unresolved peptidoglycan. CtpA overexpression reduces cell curvature in a manner similar to deleting the intermediate filament protein crescentin, but it does not disrupt crescentin localization or membrane attachment. Although it has no obvious signal sequence or transmembrane-spanning domains, CtpA associates with the Caulobacter inner membrane. Immunolocalization experiments suggest that CtpA accumulates at the division site during the last quarter of the cell cycle. We propose that CtpA dephosphorylates one or more proteins involved in peptidoglycan biosynthesis or remodeling, which in turn affect cell separation, cell envelope integrity, and vibrioid morphology.