Plant oils are stored in oleosomes or oil bodies, which are surrounded by a monolayer of phospholipids embedded with oleosin proteins that stabilize the structure. Recently, a structural protein, Oleosin3 (OLE3), was shown to exhibit both monoacylglycerol acyltransferase and phospholipase A(2) activities. The regulation of these distinct dual activities in a single protein is unclear. Here, we report that a serine/threonine/tyrosine protein kinase phosphorylates oleosin. Using bimolecular fluorescence complementation analysis, we demonstrate that this kinase interacts with OLE3 and that the fluorescence was associated with chloroplasts. Oleosin-green fluorescent protein fusion protein was exclusively associated with the chloroplasts. Phosphorylated OLE3 exhibited reduced monoacylglycerol acyltransferase and increased phospholipase A(2) activities. Moreover, phosphatidylcholine and diacylglycerol activated oleosin phosphorylation, whereas lysophosphatidylcholine, oleic acid, and Ca(2+) inhibited phosphorylation. In addition, recombinant peanut (Arachis hypogaea) kinase was determined to predominantly phosphorylate serine residues, specifically serine-18 in OLE3. Phosphorylation levels of OLE3 during seed germination were determined to be higher than in developing peanut seeds. These findings provide direct evidence for the in vivo substrate selectivity of the dual-specificity kinase and demonstrate that the bifunctional activities of oleosin are regulated by phosphorylation.