The major protein phosphatase that dephosphorylates smooth-muscle myosin was purified from chicken gizzard myofibrils and shown to be composed of three subunits with apparent molecular masses of 130, 37 and 20 kDa, the most likely structure being a heterotrimer. The 37-kDa component was the catalytic subunit, while the 130-kDa and 20-kDa components formed a regulatory complex that enhanced catalytic subunit activity towards heavy meromyosin or the isolated myosin P light chain from smooth muscle and suppressed its activity towards phosphorylase, phosphorylase kinase and glycogen synthase. The catalytic subunit was identified as the beta isoform of protein phosphatase-1 (PP1) and the 130-kDa subunit as the PP1-binding component. The distinctive properties of smooth and skeletal muscle myosin phosphatases are explained by interaction of PP1 beta with different proteins and (in conjunction with earlier analysis of the glycogen-associated phosphatase) establish that the specificity and subcellular location of PP1 is determined by its interaction with a number of specific targetting subunits.