An apparently latent phosphatase which migrated as a protein of Mr 130,000 during sucrose density centrifugation, and a spontaneously active phosphatase (Mr 68,000) were isolated from bovine aortic smooth muscle. Basal phosphorylase phosphatase activity of the latent preparations was stimulated 12 fold by low concentrations of lysine-rich histone-H1 (30 micrograms/ml) and 6 fold by polylysine (Mr 17,000; 12 micrograms/ml), whereas the spontaneously active enzyme was only slightly affected. The enzymatic activity of the spontaneously active preparation was completely destroyed by beta-mercaptoethanol. In contrast, the apparently latent enzyme was converted to a more active form of lower molecular weight (Mr 86,000) following treatment with beta-mercaptoethanol and this form of the enzyme was still stimulateable by histone-H1. These findings show that the aortic spontaneous and apparently latent phosphatase actives are ascribable to separate enzymes and they suggest that the activity of latent phosphatase in living cells may be modulated by cationic proteins such as histones or similar effector molecules.