Indirect evidence has suggested that K-Cl cotransport in human and sheep erythrocytes is activated physiologically by a serine-threonine phosphatase. It is activated experimentally by H2O2 and by staurosporine, a kinase inhibitor. Activation by H2O2 and staurosporine is inhibited by serine-threonine phosphatase inhibitors, suggesting that the activators stimulate the phosphatase. The present study shows that sheep and human erythrocytes contain membrane-associated as well as cytosolic serine-threonine phosphatases, assayed from the dephosphorylation of 32P-labeled glycogen phosphorylase. In cells from both species, the relatively low sensitivity of the membrane enzyme to okadaic acid suggests it is type 1 protein phosphatase. The cytosolic phosphatase was much more sensitive to okadaic acid. Membrane-associated phosphatase was stimulated by both H2O2 and staurosporine. The results support earlier conclusions that the membrane-associated type 1 phosphatase identified here is regulated by phosphorylation and oxidation. The results are consistent with the phosphatase, or a portion of it, being responsible for activating K-Cl cotransport.