Coordinated coupling of biochemical reactions involving protein phosphorylation and dephosphorylation represents the hallmark of the intracellular signal transduction machinery. Distinct classes of enzymes known as kinases and phosphatases respectively drive these reactions. Alterations in activity of such signaling intermediates, either due to mutations in the corresponding genes or epigenetic modulation of their expression levels, is often the cause of many cancers. The role of kinases during signal transduction has been extensively investigated over the past several decades and the consensus view is that subsets of kinases form distinct cascades of signaling pathways. Further, the extensive crosstalk that exists between these cascades leads to a complex network configuration for the signaling machinery. Inhibitors of many of these kinases are now being exploited in cancer therapy. In contrast to this, regulation by cellular phosphatases has generally been considered to occur through isolated interactions between a given phosphatase and its target substrate. Emerging evidence, however, is beginning to suggest that phosphatases also inter-regulate each other and that such interactions can lead to the formation of discrete phosphatase-specific cascades. A phosphatase cascade may be defined broadly as a series of successive dephosphorylation reactions that occur within a cell and are catalyzed by phosphatases which are activated sequentially. In general, the term ‘phosphatase cascade’ refers to cascades that include two or more phosphatase members [1-4]. The crosstalk between such regulatory axes of phosphatase and kinase cascades provides for complex modes of regulation, with non-linear signal input/output relationships. This review discusses the implications of such phosphatase-constituted regulatory elements for both signal processing and transmission. Further, we also explore the potential that insights on the functioning of phosphatase cascades offers, for the development of new and selective strategies for cancer therapy.