The function of the Saccharomyces cerevisiae Ppz1 phosphatase is controlled by its inhibitory subunit Hal3. Hal3 is a moonlighting protein, which associates with Cab3 to form a decarboxylase involved in the CoA biosynthetic pathway. Hal3 is composed by a conserved core PD region, required for both Ppz1 regulation and CoA biosynthesis, a long Nterminal extension, and an acidic C-terminal tail. Cab3 has a similar structure, but it is not a Ppz1 inhibitor. We show here that deletion or specific mutations in a short region of the N-terminal extension of Hal3 compromise its function as a Ppz1 inhibitor in vivo and in vitro without negatively affecting its ability to interact with the phosphatase. This study defines a R-K-X (3) -VTFS-sequence whose presence explains the unexpected ability of Cab3 (but not Hal3) to regulate Ppz1 function in Candida albicans. This sequence is conserved in a subset of fungi and it could serve to estimate the relevance of Hal3 or Cab3 proteins in regulating fungal Ppz enzymes. We also show that the removal of the motif moderately affects both Ppz1 intracellular relocalization and counteraction of toxicity in cells overexpressing the phosphatase. Thus, our work contributes to our understanding of the regulation of Ppz phosphatases, which are determinants for virulence in some pathogenic fungi.Abbreviations CoA, coenzyme A; GFP, green fluorescent protein; MAP kinase, mitogen-activated protein kinase; PP1c, catalytic subunit of protein phosphatase 1; SGD, Saccharomyces Genome Database.