Very little is known about how Ser/Thr protein phosphatases specifically recruit and dephosphorylate substrates. Here, we identify how the Na+/H+-exchanger 1 (NHE1), a key regulator of cellular pH homeostasis, is regulated by the Ser/Thr phosphatase calcineurin (CN). NHE1 activity is increased by phosphorylation of NHE1 residue T779, which is specifically dephosphorylated by CN. While it is known that Ser/Thr protein phosphatases prefer pThr over pSer, we show that this preference is not key to this exquisite CN selectivity. Rather a combination of molecular mechanisms, including recognition motifs, dynamic charge-charge interactions and a substrate interaction pocket lead to selective dephosphorylation of pT779. Our data identify T779 as a site regulating NHE1-mediated cellular acid extrusion and provides a molecular understanding of NHE1 substrate selection by CN, specifically, and how phosphatases recruit specific substrates, generally.