Three isoforms of mammalian protein phosphatase-1 (PPla, PPlp and PPly) were expressed in Escherichia coli and purified to near homogeneity. The activities of all isoforms towards phosphorylase, phosphorylase kinase and myosin and their sensitivities to inhibitor-2 were similar to the native PP1 catalytic subunit (PPlC) isolated from vertebrate tissues. Like PPlC, they each formed a complex with the glycogen-targetting(G) subunit which directs PPlC to glycogen particles in skeletal muscle. However, other properties differed strikingly from native PP1 C. The expressed isoforms were 100-600-fold less sensitive to inhibitor-1, 3 -5-fold less sensitive to okadaic acid, 5 -100-fold less sensitive to microcystin-LR and approximately 20-fold more active in dephosphorylating histone H1 than native PPlC. Although PPly (like PPlC) was active in the absence of Mn2+, expressed PPla and PPlp were completely dependent on Mn2+ for activity. PPlP, like PPlC, interacted with the myofibrillar-targetting(M) complexes from skeletal-muscle and smooth-muscle producing species with enhanced myosin-phosphatase activity, whereas expressed PP1 a and PP1 y did not.The expressed isoforms of PP1 combined with inhibitor-2 to form an inactive complex (PPlI) that could be reactivated by the glycogen-synthase-kinase-3(GSK3)-catalysed phosphorylation of inhibitor-2. This procedure transformed the properties of all three expressed isoforms to those of native PPlC. Their sensitivities to inhibitor-1 , okadaic acid and microcystin-LR were increased greatly, their histone-phosphatase activities decreased and the activities of PPla and PPlP became independent of MnZ+. Furthermore PPla and PPly now interacted with the M complexes in a similar manner to PPlp and PPlC. Conversely, incubation of native PPlC with 50 mM NaF caused conversion to a Mn"+-dependent form with properties similar to those of the expressed isozymes.The G subunit from skeletal muscle or the M complex from smooth muscle could displace PPlC from activated PPlI, but not inactive PPlI, to form G-subunitlPP1C and M-complexPP1C heterodimeric complexes. Inhibitor-2 was also found to be essential for the reactivation of PP1 C from 6 M guanidinium chloride in the absence of Mn2+. Taken together, the results suggest that inhibitor-2 is critical for the correct folding of nascent PPlC polypeptides, that its function is similar to that of a molecular chaperone and that it acts as a cytosolic reservoir of PPlC molecules which can be directed to the required subcellular locations following the synthesis of specific targetting subunits.Protein phosphatase-1 (PPl), one of the major types of protein serine/threonine phosphatase in eukaryotic cells, is characterised by its specific dephosphorylation of the P-subunit of phosphorylase kinase and sensitivity to the two small