Deletion mutagenesis was used to define the core region of the catalytic subunit of rabbit muscle protein phosphatase-1. Deletions in the N terminus were found to lead to loss of expression. Deletions of up to 33 residues from the C-terminal region were tolerated, and the truncated enzymes were fully active. Deletion of an additional 21 residues led to loss of expression. Mutants which had had 33 and 25 residues deleted maintained specific activities that were comparable to those of the wild type enzyme. The response of these two deletion mutants to okadaic acid, microcystin, and inhibitor-2 was determined, Only slightly lower IC50 values were observed in all cases, showing that the C terminus itself does not play a major role in the binding of these inhibitors. The deletion mutants formed stable complexes with inhibitor a as shown by gel filtration. These studies provide unambiguous evidence that the extreme C-terminal region of protein phosphatase-1 is not directly involved in catalytic function or in the binding of inhibitor-2, microcystin, or okadaic acid, and they also establish that the first similar to 300 residues of the sequence constitute a sufficient core for protein phosphatase-1 catalytic functions.