Protein phosphatase 1I (PP-1I) is a major endogenous form of protein phosphatase 1 (PP-1) that consists of the core catalytic subunit PP-1c and the regulatory subunit inhibitor 2 (I-2). Phosphorylation of the Thr-72 residue of I-2 is required for activation of PP-1I. We studied the effects of two protein kinases identified previously in purified brain PP-1I by mass spectrometry, Cdc25C-associated kinase 1 (C-TAK1) and PFTAIRE (PFTK1) kinase, for their ability to regulate PP-1I. Purified C-TAK1 phosphorylated I-2 in reconstituted PP-1I (PP-1c. I-2) on Ser-71, which resulted in partial inhibition of its ATP-dependent phosphatase activity and inhibited subsequent phosphorylation of Thr-72 by the exogenous activating kinase GSK-3. In contrast, purified PFTK1 phosphorylated I-2 at Ser-86, a site known to potentiate Thr-72 phosphorylation and activation of PP-1I phosphatase activity by GSK-3. These findings indicate that brain PP-1I associates with and is regulated by the associated protein kinases C-TAK1 and PFTK1. Multisite phosphorylation of the I-2 regulatory subunit of PP-1I leads to activation or inactivation of PP-1I through bidirectional modulation of Thr-72 phosphorylation, the critical activating residue of I-2.