This study addresses the function of multisite phosphorylation of phosphorylase kinase catalyzed by the cAMP-dependent protein kinase. Using subunit specific protein phosphatases (the polycation-stimulated and ATP-, Mg2+-dependent enzymes), we show that the degree of phosphorylation of both the alpha and beta subunits modulates phosphorylase kinase activity. beta subunit phosphorylation is essential for activation and, independent of the degree of alpha subunit phosphorylation, enzyme fully dephosphorylated in the beta subunit is completely inactivated. alpha Subunit phosphorylation does, however, also regulate activity, and enzyme fully or partially phosphorylated in the beta subunit is inactivated as a consequence of alpha subunit dephosphorylation. The extent of inactivation caused by alpha subunit dephosphorylation is linearly dependent on the phosphorylation state of the beta subunit. Three peptide sites on the alpha subunit are phosphorylated by the cAMP-dependent protein kinase; the site primarily affecting activity is the one that is initially phosphorylated. These data provide evidence that subunit interrelationships play an important role in the regulation of phosphorylase kinase by multisite phosphorylation.