Reversible protein phosphorylation is the main mechanism of signal transduction that enables cells to rapidly respond to environmental changes by controlling the functional properties of proteins in response to external stimuli. However, whereas signal transduction is well studied in Eukaryotes and Bacteria, the knowledge in Archaea is still rather scarce. Archaea are special with regard to protein phosphorylation, due to the fact that the two best studied phyla, the Euryarchaeota and Crenarchaeaota, seem to exhibit fundamental differences in regulatory systems. Euryarchaeota (e.g. halophiles, methanogens, thermophiles), like Bacteria and Eukaryotes, rely on bacterial-type two-component signal transduction systems (phosphorylation on His and Asp), as well as on the protein phosphorylation on Ser, Thr and Tyr by Hanks-type protein kinases. Instead, Crenarchaeota (e.g. acidophiles and (hyper)thermophiles) only depend on Hanks-type protein phosphorylation. In this review, the current knowledge of reversible protein phosphorylation in Archaea is presented. It combines results from identified phosphoproteins, biochemical characterization of protein kinases and protein phosphatases as well as target enzymes and first insights into archaeal signal transduction by biochemical, genetic and polyomic studies.