The PKR protein kinase is among the best-studied effectors of the host interferon (IFN)-induced antiviral and antiproliferative response system. In response to stress signals, including virus infection, the normally latent PKR becomes activated through autophosphorylation and dimerization and phosphorylates the eIF2␣ translation initiation factor subunit, leading to an inhibition of mRNA translation initiation. While numerous virally encoded or modulated proteins that bind and inhibit PKR during virus infection have been studied, little is known about the cellular proteins that counteract PKR activity in uninfected cells. Overexpression of PKR in yeast also leads to an inhibition of eIF2␣-dependent protein synthesis, resulting in severe growth suppression. Screening of a human cDNA library for clones capable of counteracting the PKR-mediated growth defect in yeast led to the identification of the catalytic subunit (PP1 C ) of protein phosphatase 1␣. PP1 C reduced double-stranded RNA-mediated auto-activation of PKR and inhibited PKR transphosphorylation activities. A specific and direct interaction between PP1 C and PKR was detected, with PP1 C binding to the N-terminal regulatory region regardless of the double-stranded RNA-binding activity of PKR. Importantly, a consensus motif shared by many PP1 C -interacting proteins was necessary for PKR binding to PP1 C . The PKR-interactive site was mapped to a C-terminal non-catalytic region that is conserved in the PP1 C 2 isoform. Indeed, co-expression of PP1 C or PP1 C 2 inhibited PKR dimer formation in Escherichia coli. Interestingly, co-expression of a PP1 C mutant lacking the catalytic domain, despite retaining its ability to bind PKR, did not prevent PKR dimerization. Our findings suggest that PP1 C modulates PKR activity via protein dephosphorylation and subsequent disruption of PKR dimers.Eukaryotic cells generally down-regulate protein synthesis in response to stress conditions presumably to protect against the harmful effects of toxic agents, to conserve resources that are needed to survive under adverse conditions, or to activate apoptosis (1). A major control mechanism for this cellular stress response involves protein phosphorylation of the ␣ subunit of the translation initiation factor 2 (eIF2␣) on serine 51 (reviewed in Ref.2). When bound to GTP, eIF2 promotes the assembly of the translation initiation complex between MettRNA i and the 40 S ribosomal subunit, a process that results in GTP hydrolysis and an eIF2-GDP complex. Phosphorylation of eIF2␣ subverts the recycling step required for the formation of an active eIF2-GTP complex, thereby reducing the rate of mRNA translation initiation and, ultimately, an inhibition of global cellular protein synthesis. At least four structurally related serine/threonine protein kinases, each responding to specific stress stimuli, phosphorylate eIF2␣ (reviewed in Ref.3): the yeast GCN2 kinase, activated by amino acid starvation; the reticulocyte-specific HRI kinase, activated by heme depletion; the endoplasmic reticulu...