This study describes a novel mode of activation for the Ca(2+)/calmodulin-dependent protein phosphatase calcineurin. Using purified calcineurin from Dictyostelium discoideum we found a reversible, Ca(2+)/calmodulin-independent activation by the long chain unsaturated fatty acids arachidonic acid, linoleic acid, and oleic acid, which was of the same magnitude as activation by Ca(2+)/calmodulin. Half-maximal stimulation of calcineurin occurred at fatty acid concentrations of approximately 10 microM with either p-nitrophenyl phosphate or RII phosphopeptide as substrates. The methyl ester of arachidonic acid and the saturated fatty acids palmitic acid and arachidic acid did not activate calcineurin. The activation was shown to be independent of the regulatory subunit, calcineurin B. Activation by Ca(2+)/calmodulin and fatty acids was not additive. In binding assays with immobilized calmodulin, arachidonic acid inhibited binding of calcineurin to calmodulin. Therefore fatty acids appear to mimic Ca(2+)/calmodulin action by binding to the calmodulin-binding site.