Specificity of signaling kinases and phosphatases toward their targets is usually mediated by docking interactions with substrates and regulatory proteins. Here, we characterize the motifs involved in the physical and functional interaction of the phosphatase calcineurin with a group of modulators, the RCAN protein family. Mutation of key residues within the hydrophobic docking-cleft of the calcineurin catalytic domain impairs binding to all human RCAN proteins and to the calcineurin interacting proteins Cabin1 and AKAP79. A valine-rich region within the RCAN carboxyl region is essential for binding to the docking site in calcineurin. Although a peptide containing this sequence compromises NFAT signaling in living cells, it does not inhibit calcineurin catalytic activity directly. Instead, calcineurin catalytic activity is inhibited by a motif at the extreme C-terminal region of RCAN, which acts in cis with the docking motif. Our results therefore indicate that the inhibitory action of RCAN on calcineurin-NFAT signaling results not only from the inhibition of phosphatase activity but also from competition between NFAT and RCAN for binding to the same docking site in calcineurin. Thus, competition by substrates and modulators for a common docking site appears to be an essential mechanism in the regulation of Ca 2؉ -calcineurin signaling.docking interaction ͉ NFAT ͉ PxIxIT ͉ Cabin1 ͉ phosphatase P rotein kinases and phosphatases are central to many intracellular signal transduction processes. In general, these signaling proteins rely on binding interactions both for interaction with upstream regulators and for enzymatic modification of substrates. In some cases, these interactions are mediated by dedicated modular domains fused to the catalytic domain. In others, the binding surfaces are within the catalytic domain but do not overlap the active site. Both these binding interactions are known as docking interactions and are envisaged principally as a mechanism to increase substrate specificity (1). The serine/threonine protein phosphatase calcineurin (CN, PP2B) uses both of these binding strategies to organize its interactome. CN is a heterodimer composed of a catalytic subunit calcineurin A (CnA) and a regulatory subunit CnB. The phosphatase domain in CnA is connected, through a sequence known as the linker, to a regulatory region that acts as a protein-protein interacting platform and includes binding domains for CnB and calmodulin (CaM) and an autoinhibitory (AI) segment. Increases in intracellular Ca 2ϩ allow interaction of CaM with heterodimeric CN, displacing AI from the active site to allow CN to dephosphorylate its substrates (2). The bestcharacterized CN-substrate interaction is that with members of the nuclear factor of activated T cells (NFAT) family of transcription factors (3). The N-terminal region of NFAT proteins contains 2 CN-binding sites, neither of which contains the substrate motif. These docking motifs are the PxIxIT sequence (4) and the LxVP motif (5, 6). Two CnA regions are important for int...