Dendritic spines receive the vast majority of excitatory synaptic contacts in the mammalian brain and are presumed to contain machinery for the integration of various signal transduction pathways. Protein phosphatase 1 (PP1) is greatly enriched in dendritic spines and has been implicated in both the regulation of ionic conductances and long-term synaptic plasticity. The molecular mechanism whereby PP1 is localized to spines is unknown. We have now characterized a novel protein that forms a complex with the catalytic subunit of PP1 and is a potent modulator of PP1 enzymatic activity in vitro. Within the brain this protein displays a remarkably distinct localization to the heads of dendritic spines and has therefore been named spinophilin. Spinophilin has the properties expected of a scaffolding protein localized to the cell membrane and contains a single consensus sequence in PSD95/DLG/zo-1, which implies cross-linking of PP1 to transmembrane protein complexes. We propose that spinophilin represents a novel targeting subunit for PP1, which directs the enzyme to those substrates in the dendritic spine compartment, e.g., neurotransmitter receptors, which mediate the regulation of synaptic function by PP1.