The complete amino acid sequence of bovine brain DARPP-32, a dopamine- and cyclic AMP-regulated neuronal phosphoprotein, which is a potent and specific inhibitor of the catalytic subunit of protein phosphatase-1, has been determined. The S-14C-carboxymethylated protein was subjected to enzymatic cleavage by endoproteinase Lys-C, endoproteinase Arg-C, trypsin, chymotrypsin, and Staphylococcus aureus V8 protease, and to chemical cleavage by cyanogen bromide. The overlapping sets of peptides were purified by high performance liquid chromatography and subjected to amino acid sequencing by automated Edman degradation to deduce the complete sequence. The protein consists of a single NH2-terminal blocked polypeptide chain of 202 residues, with a calculated molecular mass of 22,591 daltons, excluding the unidentified NH2-terminal blocking group. This molecular mass is significantly lower than earlier estimates based on sodium dodecyl sulfate-polyacrylamide gel electrophoresis or hydrodynamic measurements. The threonine residue that is phosphorylated by cyclic AMP-dependent protein kinase (Hemmings, H. C., Jr., Williams, K. R., Konigsberg, W. H., and Greengard, P. (1984) J. Biol. Chem. 259, 14486-14490), and that must be phosphorylated for the expression of inhibitory activity, is located at position 34. The molecule contains only 1 cysteine residue and 1 tryptophan residue, at positions 72 and 161, respectively. DARPP-32 is very hydrophilic, and contains a stretch of 16 consecutive acidic residues from position 119 to 134. The predicted secondary structure suggests the presence of 47% alpha-helix, 7% beta-sheet, and 46% random coil, with 11 beta-turns. Comparison of the complete amino acid sequence of bovine DARPP-32 with that of rabbit skeletal muscle protein phosphatase inhibitor-1 revealed a significant amount of sequence identity in the NH2-terminal regions of these two proteins. The active region of inhibitor-1 has been localized to an NH2-terminal fragment (Aitken, A., and Cohen, P. (1982) FEBS Lett. 147, 54-58), the part of the molecule that is most similar to DARPP-32. These data suggest that these two protein phosphatase inhibitors may share a common structural basis for their inhibitory activity and may be related by a common ancestral gene.