The ATP.Mg-dependent type-1 protein phosphatase and its activating factor (protein kinase FA) were identified to exist in brain synaptosome. The inactive protein phosphatase was found to exist in the synaptosomal cytosol whereas its activating factor (protein kinase FA) was present in the synaptosomal membrane, indicating that the inactive protein phosphatase and its activating factor FA are localized in two separate subcellular compartments. The membrane-bound FA was found to exist in two forms; approximately 75% of FA is inactive and trypsin-resistant, whereas 25% of FA is active and trypsin-labile. When membranes were incubated with exogenous phospholipase C, the inactive/trypsin-resistant FA could be activated and sequestered to become the active/trypsin-labile FA in a time- and dose-dependent manner. Taken together, the results provide initial evidence that the activation-sequestration of membrane-bound protein kinase FA may represent one mode of control modulating the activity of protein kinase FA and thereby to activate protein phosphatase in brain synaptosome, representing an efficient regulatory mechanism for regulating neurotransmission in the central nervous system.