Protein phosphatase 2A (PP2A) is a conserved essential enzyme that is implicated as a tumor suppressor based on its central role in phosphorylation-dependent signaling pathways. Protein phosphatase methyl esterase (PME-1) catalyzes specifically the demethylation of the C-terminal Leu309 residue of PP2A catalytic subunit (PP2Ac). It has been shown that PME-1 affects the activity of PP2A by demethylating PP2Ac, but also by directly binding to the phosphatase active site, suggesting loss of PME-1 in cells would enhance PP2A activity. However, here we show that PME-1 knockout mouse embryonic fibroblasts (MEFs) exhibit lower PP2A activity than wild type MEFs. Loss of PME-1 enhanced poly-ubiquitination of PP2Ac and shortened the half-life of PP2Ac protein resulting in reduced PP2Ac levels. Chemical inhibition of PME-1 and rescue experiments with wild type and mutated PME-1 revealed methyl-esterase activity was necessary to maintain PP2Ac protein levels. Our data demonstrate that PME-1 methyl-esterase activity protects PP2Ac from ubiquitin/proteasome degradation.