Teleost rod photoreceptors elongate in the light and shorten in darkness. We are investigating the role of cAMP-dependent protein kinase (PKA), phosphatases and target phosphoproteins in the regulation of photoreceptor cell shape. Preparations of rod fragments, consisting of the motile inner segment with attached photosensory outer segment (RIS-ROS), undergo light-stimulated elongation in culture. The PKA- selective inhibitor, H89, enhanced RIS-ROS elongation in both light and darkness, suggesting that elongation is associated with dephosphorylation of PKA substrates. Okadaic acid and calyculin A, inhibitors of type 1 and 2A phosphatases, blocked light-dependent and light-independent elongation with relative potencies suggesting that elongation requires dephosphorylation by type 1 phosphatase in light and type 2A phosphatase in darkness. To identify targets of PKA and phosphatases, RIS-ROS were isolated from retinas prelabeled with 32P- orthophosphate, and then incubated in the presence of kinase inhibitors or phosphatase inhibitors. Two phosphoproteins, PP33 and PP35, were phosphorylated by PKA and dephosphorylated by type 1 or 2A phosphatases in light- and dark-cultured RIS-ROS. PP35 (but not PP33) was immunoprecipitated by an antibody to phosducin, a PKA-regulated modulator of phototransduction (Lee et al., 1992); PP35 was also phosphorylated in vitro by a Ca2+ calmodulin-activated kinase. PP33 further differed from PP35 in its phosphopeptide maps and phosphorylation by PKC. We conclude that RIS-ROS elongation is correlated with the dephosphorylation of PKA substrates by type 1 or 2A phosphatases. Candidate mediator proteins include PP35, a fish phosducin homolog, and PP33, a newly described photoreceptor phosphoprotein.