A polycation-stimulated (PCS) protein phosphatase was isolated in high yield (280 micrograms/100 g ovaries) from Xenopus laevis oocytes through a procedure involving a tyrosine-agarose hydrophobic chromatography. The 220-kDa enzyme contains a 35-kDa and a 62-kDa subunit. It was identified as the low-Mr polycation-stimulated (PCSL) protein phosphatase. The labile p-nitrophenyl phosphatase activity, copurifying with the phosphorylase phosphatase activity, can be increased severalfold by preincubating the purified enzyme with ATP, its analogues or PPi. This activation is time-dependent and accompanied by a parallel decrease of the phosphorylase phosphatase activity. Although the stimulation was antagonized by metal ions during the preincubation, the basal and ATP-stimulated p-nitrophenyl phosphatase requires Mg2+ or Mn2+ in the assay, with pH optima of 8.5-9 and 7.5 respectively.