Ribulose-1,5-bisphosphate carboxylase/oxygenase (Rubisco) is the major catalyst in the conversion of carbon dioxide into organic compounds in photosynthetic organisms. However, its activity is impaired by binding of inhibitory sugars such as xylulose-1,5-bisphosphate (XuBP), which must be detached from the active sites by Rubisco activase. Here, we show that loss of two phosphatases in Arabidopsis thaliana has detrimental effects on plant growth and photosynthesis and that this effect could be reversed by introducing the XuBP phosphatase from Rhodobacter sphaeroides. Biochemical analyses revealed that the plant enzymes specifically dephosphorylate XuBP, thus allowing xylulose-5-phosphate to enter the Calvin-Benson-Bassham cycle. Our findings demonstrate the physiological importance of an ancient metabolite damage-repair system in degradation of by-products of Rubisco, and will impact efforts to optimize carbon fixation in photosynthetic organisms.