A high molecular weight protein phosphatase (phosphatase H-II) was isolated from rabbit skeletal muscle. The enzyme had a Mr = 260,000 as determined by gel filtration and possessed two types of subunit, of Mr = 70,000 and 35,000, respectively, as determined by sodium dodecyl sulfate-polyacrylamide gel electrophoresis. On ethanol treatment, the enzyme was dissociated to an active species of Mr = 35,000. The purified phosphatase dephosphorylated lysine-rich histone, phosphorylase a, glycogen synthase, and phosphorylase kinase. It dephosphorylated both the alpha- and beta-subunit phosphates of phosphorylase kinase, with a preference for the dephosphorylation of the alpha-subunit phosphate over the beta-subunit phosphate of phosphorylase kinase. The enzyme also dephosphorylated p-nitrophenyl phosphate at alkaline pH. Phosphatase H-II is distinct from the major phosphorylase phosphatase activities in the muscle extracts. Its enzymatic properties closely resemble that of a Mr = 33,500 protein phosphatase (protein phosphatase C-II) isolated from the same tissue. However, despite their similarity of enzymatic properties, the Mr = 35,000 subunit of phosphatase H-II is physically different from phosphatase C-II as revealed by their different sizes on sodium dodecyl sulfate-gel electrophoresis. On trypsin treatment of the enzyme, this subunit is converted to a form which is a similar size to phosphatase C-II.