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Background Protein kinases and phosphatases regulate protein phosphorylation, a critical means of modulating protein function, stability and localization. The identification of functional networks for protein phosphatases has been slow due to their redundant nature and the lack of large-scale analyses. We hypothesized that a genome-scale analysis of genetic interactions using the Synthetic Genetic Array could reveal protein phosphatase functional networks. We apply this approach to the conserved type 1 protein phosphatase Glc7, which regulates numerous cellular processes in budding yeast. Results We created a novel glc7 catalytic mutant (glc7-E101Q). Phenotypic analysis indicates that this novel allele exhibits slow growth and defects in glucose metabolism but normal cell cycle progression and chromosome segregation. This suggests that glc7-E101Q is a hypomorphic glc7 mutant. Synthetic Genetic Array analysis of glc7-E101Q revealed a broad network of 245 synthetic sick/lethal interactions reflecting that many processes are required when Glc7 function is compromised such as histone modification, chromosome segregation and cytokinesis, nutrient sensing and DNA damage. In addition, mitochondrial activity and inheritance and lipid metabolism were identified as new processes involved in buffering Glc7 function. An interaction network among 95 genes genetically interacting with GLC7 was constructed by integration of genetic and physical interaction data. The obtained network has a modular architecture, and the interconnection among the modules reflects the cooperation of the processes buffering Glc7 function. Conclusion We found 245 genes required for the normal growth of the glc7-E101Q mutant. Functional grouping of these genes and analysis of their physical and genetic interaction patterns bring new information on Glc7-regulated processes.