Reversible protein phosphorylation at serine/threonine residues is one of the most common protein modifications, widely observed in all kingdoms of life. The catalysts controlling this modification are specific serine/threonine kinases and phosphatases that modulate various cellular pathways ranging from growth to cellular death. Genome sequencing and various omics studies have led to the identification of numerous serine/threonine kinases and cognate phosphatases, yet the physiological relevance of many of these proteins remain enigmatic. In Bacillus anthracis, only one ser/thr phosphatase, PrpC, has been functionally characterized; it was reported to be non-essential for bacterial growth and survival. In the present study, we characterized another ser/thr phosphatase (PrpN) of B. anthracis by various structural and functional approaches. To examine its physiological relevance in B. anthracis, a null mutant strain of prpN was generated and shown to have defects in sporulation and reduced synthesis of toxins (PA and LF) and the toxin activator protein AtxA. We also identified CodY, a global transcriptional regulator, as a target of PrpN and ser/thr kinase PrkC. CodY phosphorylation strongly controlled its binding to the promoter region of atxA, as shown using phosphomimetic and phosphoablative mutants. In nutshell, the present study reports phosphorylation-mediated regulation of CodY activity in the context of anthrax toxin synthesis in B. anthracis by a previously uncharacterized ser/thr protein phosphatase-PrpN.