Protein phosphatase 1 (PP1) is a multifunctional enzyme with diverse roles in the nervous system, including regulation of synaptic activity and dendritic morphology. PP1 activity is controlled via association with a family of regulatory subunits that govern subcellular localization and substrate specificity. A previously undescribed class of PP1-binding proteins was detected by interaction cloning. Family members were also found to bind to cytoplasmic actin via Arg, Pro, Glu, and Leu repeat-containing sequences. The prototypical member of this family, phosphatase and actin regulator (phactr) 1 was a potent modulator of PP1 activity in vitro. Phactr-1 protein is selectively expressed in brain, where high levels were found in cortex, hippocampus, and striatum, with enrichment of the protein at synapses. Additional family members displayed highly distinct mRNA transcript expression patterns within rat brain. The current findings present a mechanism by which PP1 may be directed toward neuronal substrates associated with the actin cytoskeleton.