We show that the Sendai virus C' and C proteins exist as both phosphorylated and nonphosphorylated forms, while the Y1 and Y2 proteins are not phosphorylated in virus-infected cells. Phosphorylation occurs primarily on serine residues, most likely at the N-terminus of the C' and C proteins. Phosphatases PP1 and PP2A significantly modulate the phosphorylation status of the C proteins as evidenced by okadaic acid inhibition of these phosphatases. The other Sendai virus proteins including the cotranslationally expressed P protein are not necessary for the appropriate phosphorylation of the C' and C proteins. Differential phosphorylation and potential for the modulation of phosphorylation suggests regulatory functions for the C proteins.