The growth arrest and DNA damage-inducible protein, GADD34, was identified by its interaction with human inhibitor 1 (I-1), a protein kinase A (PKA)-activated inhibitor of type 1 protein serine/threonine phosphatase (PP1), in a yeast two-hybrid screen of a human brain cDNA library. Recombinant GADD34 (amino acids 233 to 674) bound both PKA-phosphorylated and unphosphorylated I-1 (1–171). Serial truncations mapped the C terminus of I-1 (amino acids 142 to 171) as essential for GADD34 binding. In contrast, PKA phosphorylation was required for PP1 binding and inhibition by the N-terminal I-1 (1–80) fragment. Pulldowns of GADD34 proteins expressed in HEK293T cells showed that I-1 bound the central domain of GADD34 (amino acids 180 to 483). By comparison, affinity isolation of cellular GADD34/PP1 complexes showed that PP1 bound near the C terminus of GADD34 (amino acids 483 to 619), a region that shows sequence homology with the virulence factors ICP34. 5 of herpes simplex virus and NL-S of avian sarcoma virus. While GADD34 inhibited PP1-catalyzed dephosphorylation of phosphorylase a, the GADD34-bound PP1 was an active eIF-2α phosphatase. In brain extracts from active ground squirrels, GADD34 bound both I-1 and PP1 and eIF-2α was largely dephosphorylated. In contrast, the I-1/GADD34 and PP1/GADD34 interactions were disrupted in brain from hibernating animals, in which eIF-2α was highly phosphorylated at serine-51 and protein synthesis was inhibited. These studies suggested that modification of the I-1/GADD34/PP1 signaling complex regulates the initiation of protein translation in mammalian tissues.