The activities of PP1 (protein phosphatase 1), a principal cellular phosphatase that reverses serine/threonine protein phosphorylation, can be altered by inhibitors whose activities are themselves regulated by phosphorylation. We now describe a novel PKC (protein kinase C)-dependent PP1 inhibitor, namely GBPI (gut and brain phosphatase inhibitor). The shorter mRNA that encodes this protein, GBPI-1, is expressed in brain, stomach, small intestine, colon and kidney, whereas a longer GBPI-2 splice variant mRNA is found in testis. Human GBPI-1 mRNA encodes a 145-amino-acid, 16.5 kDa protein with pI 7.92. GBPI contains a consensus PP1-binding motif at residues 21-25 and consensus sites for phosphorylation by enzymes, including PKC, PKA (protein kinase A or cAMP-dependent protein kinase) and casein kinase II. Recombinant GBPI-1-fusion protein inhibits PP1 activity with IC50=3 nM after phosphorylation by PKC. Phospho-GBPI can even enhance PP2A activity by >50% at submicromolar concentrations. Non-phosphorylated GBPI-1 is inactive in both assays. Each of the mutations in amino acids located in potential PP1-binding sequences, K21E+K22E and W25A, decrease the ability of GBPI-1 to inhibit PP1. Mutations in the potential PKC phosphoacceptor site T58E also dramatically decrease the ability of GBPI-1 to inhibit PP1. Interestingly, when PKC-phosphorylated GBPI-1 is further phosphorylated by PKA, it no longer inhibits PP1. Thus, GBPI-1 is well positioned to integrate PKC and PKA modulation of PP1 to regulate differentially protein phosphorylation patterns in brain and gut. GBPI, its closest family member CPI (PKC-potentiated PP1 inhibitor) and two other family members, kinase-enhanced phosphatase inhibitor and phosphatase holoenzyme inhibitor, probably modulate integrated control of protein phosphorylation states in these and other tissues.