Coilin is a nuclear phosphoprotein that accumulates in Cajal bodies (CBs). CBs participate in ribonucleoprotein and telomerase biogenesis, and are often found in cells with high transcriptional demands such as neuronal and cancer cells, but can also be observed less frequently in other cell types such as fibroblasts. Many proteins enriched within the CB are phosphorylated, but it is not clear what role this modification has on the activity of these proteins in the CB. Coilin is considered to be the CB marker protein and is essential for proper CB formation and composition in mammalian cells. In order to characterize the role of coilin phosphorylation on CB formation, we evaluated various coilin phosphomutants using transient expression. Additionally, we generated inducible coilin phosphomutant cell lines that, when used in combination with endogenous coilin knockdown, allow for the expression of the phosphomutants at physiological levels. Transient expression of all coilin phosphomutants except the phosphonull mutant (OFF) significantly reduces proliferation. Interestingly, a stable cell line induced to express the coilin S489D phosphomutant displays nucleolar accumulation of the mutant and generates a N-terminal degradation product; neither of which is observed upon transient expression. A N-terminal degradation product and nucleolar localization are also observed in a stable cell line induced to express a coilin phosphonull mutant (OFF). The nucleolar localization of the S489D and OFF coilin mutants observed in the stable cell lines is decreased when endogenous coilin is reduced. Furthermore, all the phosphomutant cells lines show a significant reduction in CB formation when compared to wild-type after endogenous coilin knockdown. Cell proliferation studies on these lines reveal that only wild-type coilin and the OFF mutant are sufficient to rescue the reduction in proliferation associated with endogenous coilin depletion. These results emphasize the role of coilin phosphorylation in the formation and activity of CBs.