Virulence effectors delivered into intestinal epithelial cells by Salmonella trigger actin remodeling to direct pathogen internalization and intracellular replication in Salmonella-containing vacuoles (SCVs). One such effector, SptP, functions early during pathogen entry to deactivate Rho GTPases and reverse pathogen-induced cytoskeletal changes following uptake. SptP also harbors a C-terminal protein tyrosine phosphatase (PTPase) domain with no clear host substrates. Investigating SptP's longevity in infected cells, we uncover a late function of SptP, showing that it associates with SCVs, and its PTPase activity increases pathogen replication. Direct SptP binding and specific dephosphorylation of the AAA+ ATPase valosin-containing protein (VCP/p97), a facilitator of cellular membrane fusion and protein degradation, enhanced pathogen replication in SCVs. VCP and its adaptors p47 and Ufd1 were necessary for generating Salmonella-induced filaments on SCVs, a membrane fusion event characteristic of the pathogen replicative phase. Thus, Salmonella regulates the biogenesis of an intracellular niche through SptP-mediated dephosphorylation of VCP.