Chromatography of turkey gizzard extract on Sephacryl S-300 has been shown to fractionate the various smooth muscle phosphatases. We have previously reported the purification and characterization of three of these enzymes, termed smooth muscle phosphatase (SMP)-I, -II, and -IV. Recently, we have purified SMP-III to near homogeneity. Although all of the smooth muscle phosphatases dephosphorylate the isolated myosin light chains, only SMP-III and -IV are active toward intact myosin and, therefore, are most likely to play a direct role in the muscle contraction-relaxation process. SMP-III has a higher molecular weight (390,000), as determined by gel filtration, than the other smooth muscle phosphatases and migrates as single band with a molecular weight of 40,000 in a sodium dodecyl sulfate-polyacrylamide gel. SMP-III is immunologically distinct from SMP-I and -II. It dephosphorylates heavy meromyosin and the isolated myosin light chains at a rapid rate but has low activity toward phosphorylase alpha. The activity of SMP-III is not affected by Ca2+ but is activated by Mn2+.Mg2+ stimulates the activity toward heavy meromyosin but inhibits the myosin light chain phosphatase activity. Attempts to classify SMP-III according to the scheme proposed by Ingebritsen and Cohen (Ingebritsen T. S., and Cohen, P. (1983) Science 221, 331-338) revealed that it is resistant to the heat stable inhibitor-2, suggesting that it is a Type 2 protein phosphatase. However, SMP-III is inhibited by concentrations of okadaic acid which are characteristic of Type 1 protein phosphatases and it binds to heparin-Sepharose like other Type 1 phosphatases. But most interestingly, SMP-III does not dephosphorylate the alpha- or beta-subunits of phosphorylase kinase, a property not reported for any Ser/Thr protein phosphatase.