Calcineurin was isolated from bovine cerebrum extracts by sequential chromatography on Affi-Gel blue and calmodulin affinity columns. Calcineurin so isolated was approximately 90% pure and was composed of equimolar amounts of subunit A (Mr = 61 000-63 000) and subunit B (Mr = 15 000-17 000) when examined by sodium dodecyl sulfate gel electrophoresis. A polypeptide (less than 10%) with Mr = 71 000 whose function and role remains to be investigated, was routinely detected in the calcineurin preparation. Both inhibitory activity (towards calmodulin-dependent cAMP phosphodiesterase) and phosphatase activity (with 32P-labelled myelin basic protein as substrate) were associated with calcineurin as evidenced by (i) coelution from Affi-Gel blue, Affi-Gel calmodulin, diethythaminoethyl-Sepharose, and Sephacryl S-200 chromatography columns; (ii) association with the same protein band on nondenaturing gels; (iii) similar stability upon storage at 4 degrees C and with repeated freezing and thawing; and (iv) parallel heat inactivation. Phosphatase activity of calcineurin was maximal with 32P-labelled myelin basic protein as the substrate. Using this substrate, enzyme activity was generally stimulated 5- to 10-fold in the presence of Ca2+ and calmodulin; half-maximal activation (A0.5) was observed with 25 nM calmodulin. Calmodulin increased the Vmax of the reaction without affecting the Km for the substrate. Optimum temperature and pH for the reaction were 45 degrees C and 7, respectively, in both the absence and presence of Ca2+ and calmodulin.(ABSTRACT TRUNCATED AT 250 WORDS)