Protein phosphatase inhibitor-1 is a prototypical mediator of cross-talk between protein kinases and protein phosphatases. Activation of cAMP-dependent protein kinase results in phosphorylation of inhibitor-1 at Thr-35, converting it into a potent inhibitor of protein phosphatase-1. Here we report that inhibitor-1 is phosphorylated in vitro at Ser-67 by the proline-directed kinases, Cdk1, Cdk5, and mitogen-activated protein kinase. By using phosphorylation state-specific antibodies and selective protein kinase inhibitors, Cdk5 was found to be the only kinase that phosphorylates inhibitor-1 at Ser-67 in intact striatal brain tissue. In vitro and in vivo studies indicated that phospho-Ser-67 inhibitor-1 was dephosphorylated by protein phosphatases-2A and -2B. The state of phosphorylation of inhibitor-1 at Ser-67 was dynamically regulated in striatal tissue by glutamate-dependent regulation of N-methyl-d-aspartic acid-type channels. Phosphorylation of Ser-67 did not convert inhibitor-1 into an inhibitor of protein phosphatase-1. However, inhibitor-1 phosphorylated at Ser-67 was a less efficient substrate for cAMP-dependent protein kinase. These results demonstrate regulation of a Cdk5-dependent phosphorylation site in inhibitor-1 and suggest a role for this site in modulating the amplitude of signal transduction events that involve cAMP-dependent protein kinase activation.