p34cdc2 kinase, a critical regulator of the cell cycle, has been shown to recognize the consensus sequence S/TP in proteins such as histone H1, the retinoblastoma gene product RB and the carboxyl-terminal domain of eukaryotic RNA polymerase II. Using phosphorylated synthetic peptides, representing the p34cdc2 phosphorylation sites in these proteins and histone H1 protein as substrates, we investigated the substrate specificity of the different oligomeric forms of the polycation-stimulated (PCS/type-2A) protein phosphatase and the active catalytic subunit of the ATP,Mg-dependent (AMDc/type 1) protein phosphatase. The results show that the oligomeric structure of the PCS phosphatases is an important determinant for efficient dephosphorylation. The trimeric PCSH1 and PCSM phosphatases are about 10-20-fold-better histone H1 phosphatases than the dimeric PCSH2 and PCSL phosphatases and about 100-fold better than the catalytic subunit (PCSC), suggesting a regulatory role for the 72-kDa, 65-kDa and 55-kDa subunits. The RB peptide = INGS(P)PRT(P)PRRGQNR, is preferred over phosphorylase a (8-fold) by the PCSH1 phosphatase and is about a 40-fold and 95-fold-better substrate for the PCSH1 phosphatase than for the PCSM and PCSL phosphatases, respectively. The primary structure surrounding the S/T(P)P motif, by itself a strong negative determinant for dephosphorylation, can harbour positive features which relieve the constraint imposed by the carboxyl-terminal proline. Thus, the RB peptide INGS(P)PRT(P)PRRGQNR, in which the T(P)P configuration is preferred over the S(P)P sequence, is an extremely good and specific substrate for the PCSH1 phosphatase (Km = 10 microM, Vmax = 3882 nmol.min-1.mg-1). The AMDC phosphatase is a poor phosphatase for all the phosphopeptides tested, unless Mn2+ is added. Its histone H1 phosphatase activity is much less sensitive than its phosphorylase a and phosphopeptide phosphatase activity to inhibition by the modulator or inhibitor-1. The results strongly suggest a role for the trimeric PCSH1 phosphatase in reversing the p34cdc2 phosphorylations.