Although protein kinase Cdk5-p35 is important in many aspects of the development and function of the central nervous system, relatively little is known about its regulation. In the present study, we examined the relationship between the association of this kinase with membranes and its activity in perinatal and adult rat brains. Cdk5-p35 in perinatal brain exhibited higher activity than that found in adult tissue. Gel filtration chromatography revealed that a portion of Cdk5-p35 from fetal brain occurred as a soluble complex, whereas Cdk5-p35 in adult brain occurred predominantly as a membrane-bound complex. Furthermore, soluble Cdk5-p35 in perinatal brain displayed elevated kinase activity, whereas membrane-bound Cdk5-p35 was highly active only in the presence of detergent. This more active soluble form of Cdk5-p35 correlated to a form in which p35 was phosphorylated, whereas the less active membrane-bound form of Cdk5 correlated to the dephosphorylated form of p35, as evidenced by a downward shift in electrophoretic mobility. Cdk5 activity and transition from soluble to membrane-associated compartments could be modulated by conditions that affected the phosphorylation or dephosphorylation of p35. For example, dephosphorylation of p35 in brain extracts was suppressed by selective inhibition of protein phosphatase-1. Together, these results suggest that the kinase activity of Cdk5-p35 is regulated through its association with membranes, which in turn is under the control of Cdk5-dependent phosphorylation and protein phosphatase-1-dependent dephosphorylation of p35.