A growing number of studies employ synthetic biology approaches to recreate and rewire existing signaling pathways. Nature achieves control of dynamics processes such cell migration via intricate networks of signaling cascades mediated by protein phosphorylation. Engineering of specific phosphorylation-mediated pathways is a challenging task, partly because current methods for temporal regulation of protein kinases and phosphatases are very limited. We have developed a new method for activation of protein kinases and protein phosphatases in living cells. Insertion of an engineered allosteric switch, the iFKBP domain, at a structurally conserved position within the catalytic domain of a kinase or a phosphatase makes the modified enzyme inactive. Treatment with rapamycin triggers interaction with a small FKBP-rapamycin-binding domain (FRB) and restores the activity of the enzyme. Molecular dynamics simulation studies suggest an allosteric mechanism for regulation of the engineered enzymes. The reagents used in this method are genetically encoded and membrane permeable, enabling application in many systems. Based on the structural similarity of catalytic domains this method should be applicable to majority of protein kinases and tyrosine phosphatases. We have already developed rapamycin-regulated (RapR) analogs of kinases FAK, Src, p38, and phosphatases Shp2, PTP1B, and PTP-PEST. Using PTP-PEST as an example we demonstrate that amino acid sequence alignment provides sufficient information for generation of new RapR-phosphatases. Through conjugation of FRB to a desired protein target, we were able to restrict kinase or phosphatase activation to interaction with a specific downstream target, or specific subcellular locations. This approach opens new opportunities for manipulation of phosphorylation-mediated signaling pathways in living cells.