We show that the fission yeast dis2 protein phosphatase, which is highly similar to mammalian type 1 phosphatase, is a phosphoprotein containing phosphoserine (phospho-S) and threonine (phospho-T). It has several phosphorylation sites, two of which locate in the C-terminus. Phospho-T was abolished in the alanine substitution mutant at the C-terminal T316, which is conserved as a residue in the cdc2 consensus, TPPR, in a number of type 1-like phosphatases. In G2-arrested cdc2-L7 cells, the degree of T316 phosphorylation was reduced, whereas it was enhanced in metaphase-arrested nuc2-663 mutant cells. Phospho-T was produced in dis2 by fission yeast cdc2 kinase, but not in the substitution mutant A316, indicating that the T316 residue was the site for cdc2 kinase in vitro. Phosphatase activity of wild type dis2 was reduced by incubation with cdc2 kinase, but that of mutant dis2-A316 was not. Phosphorylation of T316 hence has a potential significance in cell cycle control in conjunction with cdc2 kinase activation and inactivation. Overexpression phenotypes of wild type dis2+, sds21+ and mutant dis2-A316, sds21-TPPR genes were consistent with negative regulation of dis2 by phosphorylation. This type of regulation would explain why cells harboring the dis2-11 mutation enter mitosis but fail to exit from it.