Protein phosphatase type I catalytic subunit (PP1c) is a serine/threonine phosphatase involved in the dephosphorylation of many proteins in eukaryotic cells. It associates with several known targeting or regulatory subunits that directly regulate PP1c activity toward specific substrates. The recently identified Phosphatase Nuclear Targeting Subunit (PNUTS) binds to PP1c and inhibits PP1 activity toward phosphorylase a. One of the substrates of PP1c has been shown to be the cell cycle regulatory protein, Retinoblastoma (pRb). In this study, we show that PNUTS dissociates from PP I c under mildly hypoxic cell growth conditions that lead to an increase of PP1c activity toward pRb. We developed an assay that measures pRb-directed PP1c activity and show that a GST-PNUTS fusion protein inhibits phosphatase activity toward pRb when using PP1c from cell lysates, GST-PP1c, or purified PP1c. These studies suggest that PNUTS is involved in the regulation of PP1c activity toward pRb. (C) 2002 Elsevier Science (USA). All rights reserved.