Many key regulatory proteins exist in cells as either a phosphorylated or a dephosphorylated form, their steady-state levels of phosphorylation reflecting the relative activities of the protein kinases and protein phosphatases that catalyse the interconversion process. Phosphorylation of seryl or threonyl (and occasionally tyrosyl) residues triggers small conformational changes in these proteins that alter their biological properties. Hormones and other extracellular signals transmit information to the interior of the cell by activating transmembrane signalling systems that control the production of a relatively small number of chemical mediators, termed 'second messengers'. These substances regulate the activities of protein kinases and phosphatases, and so alter the phosphorylation states of many intracellular proteins, accounting for the diversity of action of hormones. In this lecture I review recent work which demonstrates that a wide variety of cellular processes are controlled by relatively few protein kinases and protein phosphatases with pleiotropic actions. These enzymes provide the basis of an interlocking network that allows extracellular signals to coordinate biochemical functions.