The circadian clock is regulated by a transcription/translation negative feedback loop. A key negative regulator of circadian rhythm in mammals is the PER2 (mammalian PERIOD 2) protein. Its daily degradation at the end of the night accompanies derepression of transcription. CKI epsilon (casein kinase I epsilon) has been identified as the kinase that phosphorylates PER2, targeting it for ubiquitin-mediated proteasomal degradation. We now report that PER2 degradation is also negatively regulated by PP1 (protein phosphatase 1)-mediated dephosphorylation. In Xenopus egg extract, PP1 inhibition by Inhibitor-2 accelerated mPER2 degradation. Co-immunoprecipitation experiments showed that PER2 bound to PP1c in transfected HEK-293 cells. PP1 immunoprecipitated from HEK-293 cells, mouse liver and mouse brain, dephosphorylated CKI epsilon-phosphorylated PER2, showing that PER2 is a substrate for mammalian endogenous PP1. Moreover, overexpression of the dominant negative form of PP1c, the D95N mutant, accelerated ubiquitin and proteasome-mediated degradation of PER2, and shortened the PER2 half-life in HEK-293 cells. Over-expression of the PP1 inhibitors, protein phosphatase I holoenzyme inhibitor-1 and Inhibitor-2, confirmed these results. Thus PP I regulates PER2 stability and is therefore a candidate to regulate mammalian circadian rhythms.