A continuous spectrophotometric assay for the determination of protein phosphatase activity is presented. The assay incorporates the coupled enzyme system of Webb (M. R. Webb, 1992, Proc. Natl. Acad. Sci. USA 89, 4884-4887), which used purine nucleoside phosphorylase and the chromophoric substrate 7-methyl-6-thioguanosine for the quantitation of inorganic phosphate. The assay is exemplified and validated here for the phosphorylase phosphatase activity of protamine-stimulated protein phosphatase 2A1 (PP-2A1). The effects of reaction components on the activities of both PP-2A1 and purine nucleoside phosphorylase were studied. The application of the coupled assay system to kinetic analysis of the phosphorylase phosphatase activity of PP-2A1 and to the assay of the catalytic subunits of type 1 and 2A protein phosphatases and a recombinant type 1 catalytic subunit is demonstrated. The applicability of this coupled enzyme system to the assay of other protein phosphatases is discussed.