Precise regulation of protein phosphorylation is critical for many cellular processes, and dysfunction in this process has been linked to various neurological disorders and diseases. Protein phosphatase 1 (PP1) is a ubiquitously expressed serine/threonine phosphatase with three major isoforms, (α, β, γ) and hundreds of known substrates. Previously, we reported that PP1α and PP1γ are essential for the known role of PP1 in synaptic physiology and learning/memory, while PP1β displayed a surprising opposing function. De novo mutations in PP1β cause neurodevelopmental disorders in humans, but the mechanisms involved are currently unknown. A Cre-Lox system was used to delete PP1β specifically in neurons in order to study its effects on developing mice. These animals fail to survive to 3 postnatal weeks, and exhibit deficits in cortical myelination and glutamate release. There was defective compound action potential (CAP) propagation in the optic nerve of the null mice, which was traced to a deficit in the formation of nodes of Ranvier. Finally, it was found that phosphorylation of the PP1β-specific substrate, myosin light chain 2 (MLC2), is significantly enhanced in PP1β null optic nerves. Several novel important in vivo roles of PP1β in neurons were discovered, and these data will aid future investigations in delineating the mechanisms by which de novo mutations in PP1β lead to intellectual and developmental delays in patients.