It has been known for over a decade that inhibition of protein phosphatase 1 (PP1) activity prevents entry into M phase, but the relevant substrate has not been identified. We report here that PP1 is required for dephosphorylation of the Cdc2-directed phosphatase Cdc25 at Ser287 (of Xenopus Cdc25; Ser216 of human Cdc25C), a site that suppresses Cdc25 during interphase. Moreover, PP1 recognizes Cdc25 directly by interacting with a PP1-binding motif in the Cdc25 N-terminus. We have also found that 14-3-3 binding to phospho-Ser287 protects Cdc25 from premature dephosphorylation. Upon entry into M phase, 14-3-3 removal from Cdc25 precedes Ser287 dephosphorylation, suggesting the existence of a phosphatase- independent pathway for 14-3-3 removal from Cdc25. We show here that this dissociation of 14-3-3 from Cdc25 requires the activity of the cyclin-dependent kinase Cdk2, providing a molecular explanation for the previously reported requirement for Cdk2 in promoting mitotic entry. Collectively, our data clarify several steps important for Cdc25 activation and provide new insight into the role of PP1 in Cdc2 activation and mitotic entry.