The role of phosphatases in the impairment of MAPK signaling, which is directly responsible for Leishmania-induced macrophage dysfunction, is still poorly understood. Gene expression profiling revealed that Leishmania donovani infection markedly up-regulated the expression of three phosphatases: MKP1, MKP3, and PP2A. Inhibition of these phosphatases prior to infection points toward preferential induction of the Th2 response through deactivation of p38 by MKP1. On the other hand, MKP3 and PP2A might play significant roles in the inhibition of iNOS expression through deactivation of ERK1/2. Among various PKC isoforms, PKCzeta was associated with induction of MKP3 and PP2A in infected macrophages, whereas PKCepsilon was correlated with MKP1 induction. Inhibition of phosphatases in L. donovani-infected BALB/c mice shifted the cytokine balance in favor of the host by inducing TNF-alpha and iNOS expression. This was validated by cystatin, an immunomodulator and curing agent for experimental visceral leishmaniasis, which showed that inhibition of MKPs and PP2A activity may be necessary for a favorable T cell response and suppression of organ parasite burden. This study, for the first time, suggests the possibility of the involvement of MAPK-directed phosphatases in the establishment of L. donovani infection.