The family of PII signal transduction proteins consists of one of the most highly conserved signalling proteins in nature. The cyanobacterial PII homologue transmits signals on the nitrogen and carbon status of the cells through phosphorylation of a seryl residue. Recently, we identified a protein phospha-tase 2C (PP2C) homologue from the cyanobacterium Synechocystis PCC 6803, termed PphA, to be the cellular phospho-PII (PII-P) phosphatase. In this investigation, we characterized the enzymatic properties of PphA and investigated the regulation of its catalytic activity towards PII-P. PphA dephosphorylates phosphocasein and PII-P with similar efficiency in a strictly Mg2+- or Mn2+-dependent reaction. Low-molecular-weight phosphorylated molecules are poor substrates for PphA. Its reactivity towards PII-P, but not towards phosphocasein, is inhibited by various nucleotides, suggesting that this effect is based on specific properties of the PII protein. The inhibitory effect of ATP can be strongly enhanced by the addition of 2-oxoglutarate or oxaloacetate. At low concentrations of 2-oxoglutarate, changes in the ATP levels within the physiological range affect the degree of PII-Pase inhibition, whereas at 2-oxoglutarate levels beyond 0.1 mM, inhibition is almost complete at very low ATP levels. This suggests that PII dephosphorylation is not only sensitive to 2-oxoglutarate and oxaloacetate levels, it also integrates signals from the energy charge of the cells under specific cellular conditions.