The hepatitis E virus causes acute viral hepatitis endemic in much of the developing world and is a serious public health problem. However, due to the lack of an in vitro culture system or a small animal model, its biology and pathogenesis are poorly understood. We have shown earlier that the ORF3 protein (pORF3) of hepatitis E virus activates ERK, a member of the MAPK superfamily. Here we have explored the mechanism of pORF3-mediated ERK activation and demonstrated it to be independent of the Raf/MEK pathway. Using biochemical assays, yeast two-hybrid analysis, and intracellular fluorescence resonance energy transfer we showed that pORF3 binds Pyst1, a prototypic member of the ERK-specific MAPK phosphatase. The binding regions in the two proteins were mapped to the N terminus of pORF3 and a central portion of Pyst1. Expression of pORF3 protected ERK from the inhibitory effects of ectopically expressed Pyst1. This is the first example of a viral protein regulating ERK activation by inhibition of its cognate dual specificity phosphatase.