The Ser/Thr protein phosphatase (PPase) Ppz1 is an enzyme related to the ubiquitous type-1 PPases (PP1c) but found only in fungi. It is regulated by an inhibitory subunit, Hal3, which binds to its catalytic domain. Overexpression of Ppz1 is highly toxic for yeast cells, so its de-regulation has been proposed as a target for novel antifungal therapies. While modulation of PP1c by its many regulatory subunits has been extensively characterized, the manner by which Hal3 controls Ppz1 remains unknown. We have used error-prone PCR mutagenesis to construct a library of Ppz1 variants and developed a functional assay to identify mutations affecting the binding or/and the inhibitory capacity of Hal3. We have characterized diverse Ppz1 mutated versions in vivo and in vitro and found that, although they were clearly refractory to Hal3 inhibition, none of them exhibited significant reduction in Hal3 binding. Mapping the mutations strengthened the notion that Hal3 does not interact with Ppz1 through its RVxF-like motif (found in most PP1c regulators). In contrast, the most relevant mutations mapped to a conserved α-helix region used by mammalian Inhibitor-2 to regulate PP1c. Therefore, modulation of PP1c and Ppz1 by their subunits likely differs, but could share some structural features.Protein phosphorylation is a widespread mechanism for controlling cellular processes. The phosphorylation state of a given protein results from the opposing activities of protein kinases and protein phosphatases (PPases). Yeast cells contain different kinds of PPases that are also found in other eukaryotic organisms, including humans, while they also contain fungal-specific enzymes, such as the Ppz1 Ser/Thr protein phosphatase. Ppz1 is composed of a catalytic carboxyl-terminal domain, which is approximately 60% identical to the ubiquitous catalytic subunit of protein phosphatase 1 (PP1c), and a largely unstructured NH 2 -terminal extension 1 . In budding yeast, Ppz1 is involved in the regulation of monovalent ion homeostasis, by inhibiting the expression of the Na + /K + -ATPase Ena1 2, 3 and the transport of potassium through the Trk1/Trk2 high-affinity transporters 4, 5 . Consequently, ppz1 deletion mutants are tolerant to toxic Na + and Li + cations 2 . These regulatory effects impact on diverse cellular functions, such as cell wall integrity and osmotic stability 4, 6, 7 , translational efficiency 8 , and progress through the cell cycle 9 . It is worth noting that recent work has identified Ppz1 as one of the most toxic proteins when overexpressed in budding yeast 10 , although the molecular basis for this effect is unknown. Ppz1 is regulated in vivo by Hal3/Sis2, a protein originally identified as a high-copy suppressor of the sit4 cell cycle-related growth defect 11 and by its capacity to confer halotolerance 12 . Hal3 binds to the carboxyl-terminal catalytic domain of Ppz1 and strongly inhibits its phosphatase activity, thus modulating its diverse physiological functions 13 . For that reason, cells overexpressing Hal3 are salt-tol...