Streptococcus pneumoniae (the pneumococcus) is a major human pathogen, causing significant mortality and morbidity annually. The fact that the predominant virulence factor of the pneumococcus, the capsular polysaccharide (CPS) is regulated by a phosphotyrosine regulatory system, CpsBCD, led us to investigate an uncharacterised protein tyrosine phosphatase, Spd1837. However, our initial study suggested that the phosphatase played no role in CPS regulation. The pneumococcus is known to produce large quantities of hydrogen peroxide (H2O2) predominantly via the pyruvate oxidase, SpxB reaction. We found that the phosphatase activity of Spd1837 could be inhibited by H2O2in vitro. This led us to investigate whether SpxB played a role in regulating the activity of Spd1837 by constructing double mutations in spxB and spd1837. spxB was deleted along with the entire spd1837 (Δspd1837∆spxB) as well as with its active site mutated (Spd1837C8S∆spxB). Interestingly, in SpxB-deficient backgrounds, Spd1837 played a role in regulating CPS, with Δspd1837∆spxB and Spd1837C8S∆spxB showing significantly reduced CPS relative to both the wildtype and the ∆spxB strains. For the Δspd1837∆spxB, the effect on CPS was oxygen-dependent, as growth in anaerobic conditions negated this effect while for the Spd1837C8S∆spxB, the reduced levels of CPS was sustained under anaerobic condition. Therefore, we showed that the phosphatase Spd1837 does modulate CPS biosynthesis by interacting with SpxB. As SpxB is also known to confer resistance to H2O2 in the pneumococcus, we also investigated the role of Spd1837 in H2O2 resistance. Both Spd1837C8S and Spd1837C8SΔspxB strains had reduced ability to resist death by H2O2 exposure compared to the wildtype and ΔspxB respectively and this was not observed with strains lacking the entire spd1837 gene. This result and the oxygen-independent effect on CPS observed with Spd1837C8S∆spxB allude to the possible dominant negative effects of expressing the mutant form of Spd1837 compared to the total lack of Spd1837 protein.