The mechanism of inhibition of protein phosphatase-1 catalytic subunit (PP-1c) by recombinant DARPP-32 and synthetic peptides was studied. DARPP-32 was expressed in Escherichia coli as a non-fusion protein using a pEt-3a plasmid, purified to homogeneity and shown to have physicochemical properties similar to those of the protein purified from bovine brain. Recombinant DARPP-32 phosphorylated on threonine-34 by cAMP-dependent protein kinase inhibited PP-1c with an IC50 approximately 0.5 nM, comparable to that obtained with bovine DARPP-32. Non-phosphorylated DARPP-32, and mutated forms in which threonine-34 was replaced by an alanine or a glutamic acid, inhibited PP-1c with an IC50 approximately 1 microM. Surface plasmon resonance analysis showed binding of PP-1c to nonphospho- and phospho-DARPP-32-(8-38) synthetic peptides with apparent Kd values of 1.2 and 0.3 microM, respectively, supporting the existence of an interaction between non-phosphorylated DARPP-32 and PP-1c that is increased by phosphorylation of DARPP-32 at threonine-34. These results suggest a model in which DARPP-32 interacts with PP-1c by at least two low affinity sites, the combination of which is responsible for the high affinity (nM) inhibition.