Greatwall (Gwl) kinase plays an essential role in the regulation of mitotic entry and progression. Mitotic activation of Gwl requires both cyclin-dependent kinase 1 (CDK1)-dependent phosphorylation and its autophosphorylation at an evolutionarily conserved serine residue near the carboxyl terminus (Ser-883 in Xenopus). In this study we show that Gwl associates with protein phosphatase 1 (PP1), particularly PP1γ, which mediates the dephosphorylation of Gwl Ser-883. Consistent with the mitotic activation of Gwl, its association with PP1 is disrupted in mitotic cells and egg extracts. During mitotic exit, PP1-dependent dephosphorylation of Gwl Ser-883 occurs prior to dephosphorylation of other mitotic substrates; replacing endogenous Gwl with a phosphomimetic S883E mutant blocks mitotic exit. Moreover, we identified PP1 regulatory subunit 3B (PPP1R3B) as a targeting subunit that can direct PP1 activity toward Gwl. PPP1R3B bridges PP1 and Gwl association and promotes Gwl Ser-883 dephosphorylation. Consistent with the cell cycle-dependent association of Gwl and PP1, Gwl and PPP1R3B dissociate in M phase. Interestingly, up-regulation of PPP1R3B facilitates mitotic exit and blocks mitotic entry. Thus, our study suggests PPP1R3B as a new cell cycle regulator that functions by governing Gwl dephosphorylation.