Calcineurin is a serine/threonine protein phosphatase that plays a critical role in many physiologic processes such as T-cell activation, apoptosis, skeletal myocyte differentiation, and cardiac hypertrophy. Calcineurin-dependent signals are transduced to the nucleus by nuclear factor of activated T-cells (NFAT) transcription factors that undergo nuclear translocation upon dephosphorylation and promote transcriptional activation of target genes. Several endogenous proteins are capable of inhibiting the catalytic activity of calcineurin. Modulatory calcineurin interacting protein 1 (MCIP1) is unique among these proteins on the basis of its pattern of expression and its function in a negative feedback loop to regulate calcineurin activity. Here we show that MCIP1 can be phosphorylated by MAPK and glycogen synthase kinase-3 and that phosphorylated MCIP1 is a substrate for calcineurin. Peptides corresponding to the substrate domain competitively inhibit calcineurin activity in vitro. However, a detailed structure/function analysis of MCIP1 reveals that either of two additional domains of MCIP1 is sufficient for binding to calcineurin in vitro and for inhibition of calcineurin activity in vivo. We conclude that MCIP1 inhibits calcineurin through mechanisms that include, but are not limited to, competition with other substrates such as nuclear factor of activated T-cells.