The activation of the ATP,Mg-dependent protein phosphatase [Fc.M] has been shown to involve a transient phosphorylation of the modulator subunit (M) and consequent isomerization of the catalytic subunit (Fc) into its active conformation (Jurgensen, S., Shacter, E., Huang, C. Y., Chock, P. B., Yang, S. -D., Vandenheede, J. R., and Merlevede, W. (1984) J. Biol. Chem. 259, 5864-5870). The modulator subunit constitutes the inactivating force for the enzyme, but the slow intramolecular inactivation of the phosphatase can be prevented or blocked by the addition of either the phosphorylated inhibitor-1 or Mg2+ ions. Autodephosphorylation of the modulator subunit is not prevented by the phosphoinhibitor-1, suggesting that the ATP,Mg-dependent phosphatase binds the phosphomodulator subunit in a very specific manner, different from the way it binds exogenous phosphoprotein substrates. Alternatively, the autodephosphorylation of the modulator subunit is catalyzed at a separate active site on the enzyme, which is not influenced by the binding of phosphoinhibitor-1. The phosphoinhibitor-1 does not prevent the activation of the enzyme by kinase FA when added at concentrations that totally inhibit the potential phosphorylase phosphatase activity. These results, together with other already published information, suggest separate autonomic controls of the ATP,Mg-dependent phosphatase activity by inhibitor-1 and the modulator protein through the presence of specific regulatory subunits on the enzyme.