The developmentally regulated nuclear factors of the Eya family function in transcriptional regulation of developmental genes and have been recently characterized as tyrosine phosphatases. Eya is a component of the retinal determination gene network, which is crucial for the development of multiple organ systems in mammals, with loss of Eya leading to increased apoptosis and organ agenesis. While phosphatase activity is important for proper organ development, lack of confirmed substrates for Eya phosphatase activity has prevented a deeper understanding of Eya’s function. We sought to identify phosphatase substrates for Eya using multiple strategies including biochemical purification, transcriptional assays, and candidate testing. Contrary to initial assumptions, the phosphatase activity of Eya was dispensable for transcriptional activation of the Eya target gene Sall1 and transcriptional activation was wholly mediated by the N-terminal transactivation domain. We found that the phosphatase activity of Eya functions in a non-transcriptional context, by preventing apoptotic death under conditions of genotoxic stress. Under DNA damage conditions, Eya relocalizes within the nucleus to sites of DNA double strand breaks, where it interacts with the histone variant H2AX. H2AX is phosphorylated under basal conditions on tyrosine 142, a mark that is directly removed by Eya as part of the DNA damage response. H2AX is known to become phosphorylated on serine 139 early in the DNA damage response, and this phosphoserine mark serves as a binding surface for various DNA repair proteins, including MDC1. Persistent phosphorylation of tyrosine 142 in the absence of Eya leads to increased cellular apoptosis in response to genotoxic stress due to differential binding of apoptotic versus repair complexes to the phosphorylated tail of H2AX. Thus, in the context of the DNA damage response, Eya possesses a novel anti-apoptotic function that is dependent on phosphatase activity. We propose that in-vivo Eya exists as a dual-function nuclear factor, activating a transcriptional program as a component of the retinal determination network in basal conditions and dephosphorylating H2AX on tyrosine 142 as a component of the DNA damage response under conditions of genotoxic stress.