Abstract.Previous studies have shown that pigment granule dispersion and aggregation in melanophores of the African cichlid, Tilapia mossambica, are regulated by protein phosphorylation and dephosphorylation, respectively (Rozdzial, M. M., and L. T. Haimo. 1986. Cell. 47:1061-1070. The present studies suggest that calcineurin, a Ca2÷/calmodulin-stimulated phosphatase, is the endogenous phosphatase that mediates pigment aggregation in melanophores. Aggregation, but not dispersion, is inhibited by okadaic acid at concentrations consistent with an inhibition of calcineurin activity. Inhibition of aggregation in melanophores that have been BAPTA loaded or treated with calmodulin antagonists implicate Ca 2+ and calmodulin, respectively, in this process. Moreover, addition of calcineufin rescues aggregation in lysed melanophores which are otherwise incapable of aggregating pigment. Immunoblotting with an anticalcineurin IgG reveals that calcineurin is a component of the dermis, which contains the melanophores, and indirect immunofluorescence localizes calcineurin specifically to the melanophores. Finally, this antibody, which inhibits calcineurin's phosphatase activity (Tash, J. S., M.