Protein phosphorylation is a critical cellular process regulated by the competing actions of protein kinases (PKs) and phosphatases (PPs). While several hundred PKs exist in mammalian cells, there are only a few dozen PPs. PPs typically target Ser/Thr or Tyr residues but each has different characteristics and specificities and fall into three separate classes. PPs on their own have poor substrate specificity, however, when bound to regulatory proteins their activity and specificity is tightly controlled. Mechanisms of PP regulation range from targeting to subcellular compartments by scaffolding proteins and/or protein complexes which restrict the action of PPs to specific substrates, to the inhibition of PPs by specific inhibitory molecules or inhibitor peptides. In the adult brain, PPs are essential for synaptic functions and are involved in the negative regulation of higher-order brain functions such as learning and memory. Dysregulation of their activity has been linked to several disorders including cognitive ageing and neurodegeneration, but also cancer, diabetes and obesity. Because they are critical for multiple biological functions and could constitute a new class of drug targets, they deserve to be studied in greater detail. The complexity of their modes of action and of the systems they function in, however, requires the analysis of whole systems rather than of individual proteins in isolation, as has been the case for decades using classical molecular biology. In this review, we discuss PPs in the context of the central nervous system, their role in neuronal functions, and their regulation and dysfunction in disease. Current techniques to investigate PP signalling and associated functional networks, future directions for the development of system-wide proteomic and genomic methods of analysis, and the potential for therapeutic applications are also covered.