In its dormant state, the membrane cytoskeletal linker protein ezrin takes on a NH(2) terminal-to-COOH terminal (N-C) binding conformation. In vitro evidence suggests that eliminating the N-C binding conformation by Thr(567) phosphorylation leads to ezrin activation. Here, we found for resting gastric parietal cells that the levels of ezrin phosphorylation on Thr(567) are low and can be increased to a small extent ( approximately 40%) by stimulating secretion via the cAMP pathway. Treatment of cells with protein phosphatase inhibitors led to a rapid, dramatic increase in Thr(567) phosphorylation by 400% over resting levels, prompting the hypothesis that ezrin activity is regulated by turnover of phosphorylation on Thr(567). In vitro and in vivo fluorescence resonance energy transfer analysis demonstrated that Thr(567) phosphorylation opens the N-C interaction. However, even in the closed conformation, ezrin localizes to membranes by an exposed NH(2) terminal binding site. Importantly, the opened phosphorylated form of ezrin more readily cosediments with F-actin and binds more tightly to membrane than the closed forms. Furthermore, fluorescence recovery after photobleaching analysis in live cells showed that the Thr567Asp mutant had longer recovery times than the wild type or the Thr567Ala mutant, indicating the Thr(567)-phosphorylated form of ezrin is tightly associated with F-actin and the membrane, restricting normal activity. These data demonstrate and emphasize the functional importance of reversible phosphorylation of ezrin on F-actin binding. A novel model is proposed whereby ezrin and closely associated kinase and phosphatase proteins represent a motor complex to maintain a dynamic relationship between the varying membrane surface area and filamentous actin length.