GLC7 encodes an essential serine/threonine protein type I phosphatase in Saccharomyces cerevisiae. Three other phosphatases (Ppz1p, Ppz2p, and Sal6p) share >59% identity in their catalytic region with Glc7p. ppz1 ppz2 null mutants have no apparent growth defect on rich media. However, null alleles of PPZ1 and PPZ2, in combination with mutant alleles of GLC7, confer a range of growth defects varying from slow growth to lethality. These results indicate that Glc7p, Ppz1p, and Ppz2p may have overlapping functions. To determine if this overlap extends to interaction with targeting subunits, Glc7p-binding proteins were tested for interaction in the two-hybrid system with the functional catalytic domain of Ppz1p. Ppz1p interacts strongly with a number of Glc7p regulatory subunits, including Glc8p, a protein that shares homology with mammalian PP1 inhibitor I2. Genetic data suggest that Glc8p positively affects both Glc7p and Ppz1p functions. Together our data suggest that Ppz1p and Ppz2p may have overlapping functions with Glc7p and that all three phosphatases may act through common regulatory proteins.