A novel peptide substrate for adenosine 3',5'-cyclic monophosphate-dependent protein kinase (ATP:protein phosphotransferase, EC 2.7.1.37), Leu-Arg-Arg-Trp-Ser-Leu-Gly, was synthesized. Phosphorylation of the peptide causes a 20% increase in the peptide fluorescence intensity at 358 nm. Values of Km and kcat for the phosphorylation reaction at pH 7.0 (25 degrees C), were determined to be 2.7 +/- 0.5 microM and 5.5 +/- 0.4 sec-1, respectively. The phosphorylated peptide was shown to be an effective substrate for phosphoprotein phosphatase (phosphoprotein phosphohydrolase, EC 3.1.3.16) with a Km of 113 +/- 10 microM and a kcat of 2.4 +/- 0.2 sec-1 in the presence of 2.5 mM MnCl2. Changes in the peptide fluorescence intensity as a function of its phosphorylation state provide a highly sensitive assay of cyclic AMP-dependent protein kinase and phosphoprotein phosphatase activities.