We report that the small tumor (small-t) antigen of simian virus 40 (SV40) forms complexes with nuclear protein phosphatase 2A (PP2A) and regulates the phosphorylation and transcriptional transactivation function of the cyclic AMP (cAMP)-regulatory element binding protein (CREB). PP2A coimmunoprecipitated with small t from nuclear extracts from HepG2 cells expressing small t or from rat liver nuclear extracts to which recombinant small t was added. Protein phosphatase 1 was not detected in small-t immunoprecipitates. In HepG2 cells expressing small t, dibutyryl-cAMP (Bt 2 cAMP) stimulated the phosphorylation of CREB 65-fold, whereas CREB phosphorylation was stimulated only 5-to 8-fold by Bt 2 cAMP in cells not expressing small t. Small t also inhibited the dephosphorylation of cAMP-dependent protein kinase (PKA)-phosphorylated CREB in rat liver nuclear extracts. In cells expressing small t, Bt 2 cAMP-stimulated transcription from the phosphoenolpyruvate carboxykinase (PEPCK) gene promoter was enhanced over the level of transcription from the PEPCK promoter in cells not expressing small t. Small t also enhanced Bt 2 cAMP-stimulated transcription from a Gal4-responsive promoter in cells expressing a chimeric protein containing the Gal4 DNA-binding domain linked to the CREB transactivation domain. However, small t did not stimulate transcription either from a 5′ deletion mutant of the PEPCK promoter that is not able to bind CREB or from the Gal4-responsive promoter in the absence of the Gal4-CREB protein. These data suggest that small t enhances Bt 2 cAMP-stimulated gene transcription by inhibiting the dephosphorylation of PKA-phosphorylated CREB by nuclear PP2A. These findings support previous observations that nuclear PP2A is the primary phosphatase that dephosphorylates PKA-phosphorylated CREB.