Alzheimer's disease (AD) is distinguished by the gradual loss of cognitive function, which is associated with neuronal loss and death. Accumulating evidence supports that protein phosphatases (PPs; PP1, PP2A, PP2B, PP4, PP5, PP6, and PP7) are directly linked with amyloid beta (Aβ) as well as the formation of the neurofibrillary tangles (NFTs) causing AD. Published data reported lower PP1 and PP2A activity in both gray and white matters in AD brains than in the controls, which clearly shows that dysfunctional phosphatases play a significant role in AD. Moreover, PP2A is also a major causing factor of AD through the deregulation of the tau protein. Here, we review recent advances on the role of protein phosphatases in the pathology of AD and other neurodegenerative diseases. A better understanding of this problem may lead to the development of phosphatase-targeted therapies for neurodegenerative disorders in the near future.