The glycogen-bound form of protein phosphatase-1 (PP-1G) was previously purified as a heterodimer composed of a 37-kDa catalytic (C) subunit and a proteolytically sensitive 103-kDa glycogen-binding (G) subunit [Strahlfors, P., Hiraga, A. & Cohen, P. (1985) Eur. J. Biochem. 149, 295-303]. In this paper we demonstrate by a variety of criteria that the intact G subunit is a 161-kDa protein, and that the 103-kDa species (now termed G') is itself a product of proteolysis. A second phosphorylation site for cAMP-dependent protein kinase (termed site 2) was identified on the G subunit. The site 2 serine was phosphorylated at a comparable rate to site 1, and near stoichiometric phosphorylation could be achieved in the presence and absence of glycogen. Site 2 was dephosphorylated by PP-1 at a slow rate, whereas site 1 was resistant to autodephosphorylation. PP-1G, as well as the proteolytic activity responsible for degradation of the G subunit, remained tightly associated with glycogen-protein particles during washing with a variety of solvents. The PP-1G holoenzyme was released from glycogen-protein particles by dilution, with a dissociation half point corresponding to about 10 nM PP-1G. Binding experiments with purified PP-1G and glycogen indicated a bimolecular process with Kapp values corresponding to about 8 nM glycogen and 4 nM PP-1G. Binding was not significantly affected by increasing ionic strength to 0.5 M or variation of pH from 6 to 8. The results are consistent with a high-affinity glycogen-binding domain on the G subunit, and indicate that a physiological concentrations of phosphatase and glycogen, PP-1G should be almost entirely bound to glycogen.