Protein phosphatase-1 (PP1) plays a key role in dephosphorylation in numerous biological processes such as glycogen metabolism, cell cycle regulation, smooth muscle contraction, and protein synthesis. Microorganisms produce a variety of inhibitors of PP1, which include the microcystin class of inhibitors and okadaic acid, the latter being the major cause of diarrhetic shellfish poisoning and a powerful tumor promoter. We have determined the crystal structure of the molecular complex of okadaic acid bound to PP1 to a resolution of 1.9 A. This structure reveals that the acid binds in a hydrophobic groove adjacent to the active site of the protein and interacts with basic residues within the active site. Okadaic acid exhibits a cyclic structure, which is maintained via an intramolecular hydrogen bond. This is reminiscent of other macrocyclic protein phosphatase inhibitors. The inhibitor-bound enzyme shows very little conformational change when compared with two other PP1 structures, except in the inhibitor-sensitive beta12-beta13 loop region. The selectivity of okadaic acid for protein phosphatases-1 and -2A but not PP-2B (calcineurin) may be reassessed in light of this study.