ARPP-21 (cyclic AMP-regulated phosphoprotein, Mr = 21,000) is a cytosolic neuronal phosphoprotein that is highly enriched in regions of mammalian brain that receive dopaminergic innervation, in particular the striatum. The state of phosphorylation of ARPP-21 in brain slices prepared from rat striatum was shown to be regulated by 8-bromo-cyclic AMP. Phosphorylation occurred exclusively on seryl residues contained within a single tryptic phosphopeptide as analyzed by two-dimensional thin layer electrophoresis/chromatography. The tryptic phosphopeptide derived from ARPP-21 phosphorylated in intact cells comigrated with the tryptic phosphopeptide derived from purified ARPP-21 phosphorylated by the catalytic subunit of cyclic AMP-dependent protein kinase in vitro. Purified cyclic AMP-dependent protein kinase catalyzed the incorporation of 1.1 mol of [32P]phosphate/mol of ARPP-21 exclusively on seryl residues. The amino acid sequence surrounding the site in purified ARPP-21 phosphorylated by cyclic AMP-dependent protein kinase in vitro was determined by analyzing two overlapping chymotryptic peptides isolated from [32P]phospho-ARPP-21 by reverse phase high performance liquid chromatography. A combination of gas phase and solid phase amino acid sequencing yielded a phosphorylation site sequence of -Glu-Arg-Arg-Lys-Ser(P)-Lys-Ser-Gly-Ala-Gly-. Initial rate studies of the phosphorylation of purified ARPP-21 by the catalytic subunit of cyclic AMP-dependent protein kinase yielded an apparent Km of 0.78 microM and a kcat of 2.2 s-1. A synthetic peptide based on the phosphorylation site of ARPP-21 was phosphorylated on the corresponding seryl residue with an apparent Km of 40 microM and a kcat of 4.0 s-1. These results are compatible with a physiological role for the phosphorylation of ARPP-21 by cyclic AMP-dependent protein kinase in vivo, regulated by first messengers acting via cyclic AMP, e.g. dopamine and vasoactive intestinal peptide.