In the past year significant advances have been made in our understanding of the role of protein dephosphorylation in the control of neuronal function. Molecular cloning has identified a large number of serine/threonine and tyrosine protein phosphatases in the nervous system. Many of these enzymes are selectively enriched in the nervous system, some are localized to specific neurons, and yet others are expressed only during specific periods of neuronal development. The availability of purified protein phosphatases and selective inhibitors has facilitated the analysis of these enzymes and their role in the regulation of neurotransmitter receptors and ion channels.