Bacteria that exhibit polar growth, i.e. build their peptidoglycan cell walls in restricted zones at cell poles, often show large morphological diversity and plasticity. However, their mechanisms for regulation of cell shape and cell wall assembly are poorly understood. The Gram-positive Streptomyces bacteria, like other Actinobacteria, depend on the essential coiled coil protein DivIVA for establishment of cell polarity and direction of polar growth. Streptomycetes grow as filamentous hyphae that exhibit tip extension. New hyphal tips are generated by lateral branching. Cell shape is largely determined by the control of cell wall growth at these hyphal tips. The Ser/Thr protein kinase AfsK is involved in controlling polar growth and directly phosphorylates DivIVA. Here, we identify a protein phosphatase in Streptomyces coelicolor , SppA, that dephosphorylates DivIVA in vivo and in vitro and affects growth and cell shape. An sppA mutant shows reduced rate of hyphal tip extension, altered hyphal branching patterns, and exhibits frequent spontaneous hyphal growth arrests, all contributing to the unusually dense mycelial structure and slow growth rate that characterize sppA mutants. These phenotypes are largely suppressed in an afsK sppA double mutant, showing that AfsK and SppA partially affect the same regulatory pathway and share target proteins that are involved control of polar growth in S. coelicolor . Strains with a non-phosphorylatable mutant DivIVA were constructed and confirm that the effect of afsK on hyphal branching during normal growth is mediated by DivIVA phosphorylation. However, the phenotypic effects of sppA deletion are independent of DivIVA phosphorylation and must be mediated via other substrates. Altogether, this study identifies a PPP-family protein phosphatase directly involved in the control of polar growth and cell shape determination in S. coelicolor and underscore the importance of eukaryotic-type Ser/Thr phosphorylation in regulation of growth and cell envelope biogenesis in Actinobacteria.