Whereas the protein kinases GCN2, HRI, PKR, and PERK specifically phosphorylate eukaryotic translation initiation factor 2 (eIF2α) on Ser51 to regulate global and gene-specific mRNA translation, eIF2α is dephosphorylated by the broadly acting serine/threonine protein phosphatase 1 (PP1). In mammalian cells, the regulatory subunits GADD34 and CReP target PP1 to dephosphorylate eIF2α; however, as there are no homologs of these targeting subunits in yeast, it is unclear how GLC7, the functional homolog of PP1 in yeast, is recruited to dephosphorylate eIF2α. Here, we show that a novel N-terminal extension on yeast eIF2γ contains a PP1-binding motif (KKVAF) that enables eIF2γ to pull down GLC7 and target it to dephosphorylate eIF2α. Truncation or point mutations designed to eliminate the KKVAF motif in eIF2γ impair eIF2α dephosphorylation in vivo and in vitro and enhance expression of GCN4. Replacement of the N terminus of eIF2γ with the GLC7-binding domain from GAC1 or fusion of heterologous dimerization domains to eIF2γ and GLC7, respectively, maintained eIF2α phosphorylation at basal levels. Taken together, these results indicate that, in contrast to the paradigm of distinct PP1-targeting or regulatory subunits, the unique N terminus of yeast eIF2γ functions in cis to target GLC7 to dephosphorylate eIF2α.