Microcystin-LR (MCYST-LR), a cyclic peptide hepatotoxin, associates with high-molecular-weight, liver cytosolic components. Repetitive cycles of heat denaturation and pronase digestion released 80 +/- 6% of the bound radiolabel from these components, parent toxin (22%), and two biotransformation products, with high-performance liquid chromatography (HPLC) retention times of 6.7 (52%) and 5.6 (13%) min. Both parent and the biotransformed (6.7 min) toxin appeared to be covalently bound to a monomeric protein of molecular weight 40,000 (protein plus radiolabeled toxin). Binding and biotransformation reactions were time- and temperature-dependent and did not require endogenous molecules less than 6,000 daltons. The binding appeared to be saturable with a maximum of 20 pmol MCYST-LR bound per mg protein. The binding protein(s) and biotransformation activity were present in rat liver, brain, kidney, heart, lung, small intestine, large intestine, testes, skeletal muscle, and to a lesser extent, in fat. Okadaic acid, a specific protein phosphatase inhibitor, showed a concentration-dependent inhibition of [3H]MCYST-LR binding to hepatic cytosol. The molecular weight and organ distribution of the binding protein(s), and inhibition of binding by okadaic acid were consistent with one of the binding sites being the catalytic subunit of protein phosphatase type 2A.