Protein phosphatase-1 (PP-1), a highly conserved multifunctional serine/threonine phosphatase, is enriched in dendritic spines where it plays a major role in modulating excitatory synaptic activity. In addition to established functions in spine maturation and development, multi-subunit holoenzyme forms of PP-1 modulate higher-order cognitive functions such learning and memory. Mechanisms involved in regulating PP-1 activity and localization in spines include interactions with neurabin and spinophilin, structurally related synaptic scaffolding proteins associated with the actin cytoskeleton. Since PP-1 is a critical element in synaptic development, signaling, and plasticity, alterations in PP-1 signaling in dendritic spines are implicated in various neurological and psychiatric disorders. The effects of PP-1 depend on its isoform-specific association with regulatory proteins and activation of downstream signaling pathways. Here we review the role of PP-1 and its binding proteins neurabin and spinophilin in both developing and established dendritic spines, as well as some of the disorders that result from its dysregulation.