Neurabin is a brain-specific actin and protein phosphatase-1 (PP-1) binding protein that inhibits the purified catalytic subunit of protein phosphatase-1 (PP-1(C)). However, endogenous PP-1 exists primarily as multimeric complexes of PP-1(C) bound to various regulatory proteins that determine its activity, substrate specificity, subcellular localization and function. The major form of endogenous PP-1 in brain is protein phosphatase-1(I) (PP-1(I)), a Mg(2+)/ATP-dependent form of PP-1 that consists of PP-1(C), the inhibitor-2 regulatory subunit, an activating protein kinase and other unidentified proteins. We have identified four PP-1(I) holoenzyme fractions (PP-1(IA), PP-1(IB), PP-1(IC), and PP-1(ID)) in freshly harvested pig brain separable by poly-L-lysine chromatography. Purified recombinant neurabin (amino acid residues 1-485) inhibited PP-1(IB) (IC(50)=1.1 microM), PP-1(IC) (IC(50)=0.1 microM), and PP-1(ID) (IC(50)=0.2 microM), but activated PP-1(IA) by up to threefold (EC(50)=40 nM). The PP-1(IA) activation domain was localized to neurabin(1-210). Our results indicate a novel mechanism of PP-1 regulation by neurabin as both an inhibitor and an activator of distinct forms of PP-1(I) in brain.