Inactivation of mitotic cyclin-dependent kinases (Cdks) is required for cells to exit mitosis  . In the budding yeast Saccharomyces cerevisiae, Cdk inactivation is triggered by the phosphatase Cdc14, which is activated by a complex network of regulatory proteins that includes the protein kinase Cdc15    . Here we show that the ability of Cdc15 to promote mitotic exit is inhibited by phosphorylation. Cdc15 is phosphorylated in vivo at multiple Cdk-consensus sites during most of the cell cycle, but is transiently dephosphorylated in late mitosis. Although phosphorylation appears to have no effect on Cdc15 kinase activity, a non-phosphorylatable mutant of Cdc15 is a more potent stimulator of mitotic exit than wild-type Cdc15, indicating that phosphorylation inhibits Cdc15 function in vivo. Interestingly, inhibitory phosphorylation of Cdc15 is removed by the phosphatase Cdc14 in vitro, and overproduction of Cdc14 leads to Cdc15 dephosphorylation in vivo. Thus, Cdc15 serves both as an activator and substrate of Cdc14. Although this scheme raises the possibility that positive feedback promotes Cdc14 activation, we present evidence that such feedback is not essential for Cdc14 activation in vivo. Instead, Cdc15 dephosphorylation may promote some additional function of Cdc15 that is independent of its effects on Cdc14 activation.