We have characterized the Toxoplasma gondii protein phosphatase type 1 (TgPP1) and a potential regulatory binding protein belonging to the leucine-rich repeat protein family, designated TgLRR1. TgLRR1 is capable of binding to TgPP1 to inhibit its activity and to override a G(2)/M cell cycle checkpoint in Xenopus oocytes. In the parasite, TgLRR1 mRNA and protein are both highly expressed in the rapidly replicating and virulent tachyzoites, while only low levels are detected in the slowly dividing and quiescent bradyzoites. TgPP1 mRNA and protein levels are equally abundant in tachyzoites and bradyzoites. Affinity pull down and immunoprecipitation experiments reveal that the TgLRR1-TgPP1 interaction takes place in the nuclear subcompartment of tachyzoites. These results are consistent with those of localization studies using both indirect immunofluorescence with specific polyclonal antibody and transient transfection of T. gondii vector expressing TgLRR1 and TgPP1. The inability to obtain stable transgenic tachyzoites suggested that overexpression of TgLRR1 and TgPP1 may impair the parasite's growth. Together with the activation of Xenopus oocyte meiosis reinitiation, these data indicate that TgLRR1 protein could play a role in the regulation of the T. gondii cell cycle through the modulation of phosphatase activity.