Heptapeptide microcystin and pentapeptide motuporin (nodularin-V) are equipotent inhibitors of type-1 and type-2A protein phosphatase catalytic subunits (PP-1c and PP-2Ac). Herein we describe elucidation of the molecular mechanisms involved in the interaction of these structurally similar hepatotoxins with PP-1c/PP-2Ac and identification of an important functional difference between their mode of interaction with these enzymes. Microcystin-LR, microcystin-LA, and microcystin-LL were found to interact with PP-2Ac and PP-1c by a two-step mechanism involving rapid binding and inactivation of the protein phosphatase (PPase) catalytic subunit, followed by a slower covalent interaction (within hours). Covalent adducts comprising PPase-toxin complexes were separated from free PPase by C-18 reverse-phase liquid chromatography, thus allowing the time course of covalent adduct formation to be quantitated. In contrast to microcystins, motuporin (nodularin-V) and nodularin-R were unable to form covalent complexes with either PP-1c or PP-2Ac even after 96 h incubation. Specific reduction of microcystin-LA to dihydromicrocystin-LA abolished the ability of the toxin to form a covalent adduct with PP-2Ac. Specific methyl esterification of the single Glu residue in microcystin-LR rendered this toxin inactive as a PPase inhibitor and abolished subsequent formation of a covalent adduct. Our data indicate that inactivation of PP-2Ac/PP-1c by microcystins precedes covalent modification of the PPases via a Michael addition reaction between a nucleophilic phosphatase residue and Mdha in the heptapeptide toxin. In contrast, following rapid inactivation of PP-2Ac/PP-1c by motuporin, the equivalent N-methyldehydrobutyrine residue in this toxin is unreactive and does not form a covalent bond with the PPases. These results are consistent with structural data for (i) the NMR solution structures of microcystin-LR and motuporin, which indicate a striking difference in the relative positions of their corresponding dehydroamino acids in the toxin peptide backbone, and (ii) X-ray crystallographic data on an inactive complex between PP-1c and microcystin-LR, which show a covalent bond between Cys-273 and the bound toxin.