The glycogen-binding (G) subunit of protein phosphatase-1 is phosphorylated in vivo. In rabbits injected with propranolol the serine residue termed site-1 was phosphorylated in 56% of the molecules isolated, and phosphorylation increased to 82% after administration of adrenalin. It is concluded that the G-subunit is a physiological substrate for cyclic AMP-dependent protein kinase. The G-subunit remained largely bound to glycogen even after injection of adrenalin, whereas half of the protein phosphatase-1 activity associated with glycogen was released into the cytosol. The results indicate that adrenalin induces dissociation of the catalytic subunit from the G-subunit in vivo.