Dephosphorylation of the two key regulatory factors of myosin light chain phosphatase (MLCP), CPI17 and MBS (myosin binding subunit) of MLCP was studied. While Thr38 phosphorylated CPI17 is quite susceptible to protein phosphatases, phosphorylated MBS was highly resistant to dephosphorylation. Type 2A, 2B and 2C protein phosphatases (PP2A, PP2B and PP2C), but not type 1 (PP1), dephosphorylated CPI17. The majority of the CPI17 phosphatase activity in smooth muscle was attributed to PP2A and PP2C. Phospholipids inhibited dephosphorylation of MBS and arachidonic acid (AA) inhibited PP2A activity against both MBS and CPI17, raising the possibility that AA favors the preservation of active MLCP. Consistently, while the phosphorylation of CPI17 was promptly decreased when the agonist was removed, the phosphorylation of MBS was unchanged in intact smooth muscle fiber. The results suggest that MBS phosphorylation mediated regulation of MLCP is not suitable for regulating rapid change in myosin phosphorylation. On the other hand, phosphorylated CPI17 is readily dephosphorylated thus likely to play a role in regulating fast phosphorylation–dephosphorylation cycle in cells.