The myosin light chain phosphatase (MLCP) is a cytoskeleton-associated protein phosphatase-1 (PP1) holoenzyme and a RhoA/ROCK effector, regulating cytoskeletal reorganization. ROCK-induced phosphorylation of the MLCP regulatory subunit (MYPT1) at two sites, Thr696 and Thr853, suppresses the activity, although little is known about the difference in the role. Here, we developed a new method for the preparation of the recombinant human MLCP complex and determined the molecular and cellular basis of inhibitory phosphorylation. The recombinant MLCP partially purified from mammalian cell lysates retained characteristics of the native enzyme, such that it was fully active without Mn(2+) and sensitive to PP1 inhibitor compounds. Selective thio-phosphorylation of MYPT1 at Thr696 with ROCK inhibited the MLCP activity 30%, whereas the Thr853 thio-phosphorylation did not alter the phosphatase activity. Interference with the docking of phospho-Thr696 at the active site weakened the inhibition, suggesting selective autoinhibition induced by phospho-Thr696. Both Thr696 and Thr853 sites underwent autodephosphorylation. Compared with that of Thr853, phosphorylation of Thr696 was more stable, and it facilitated Thr853 phosphorylation. Endogenous MYPT1 at Thr696 was spontaneously phosphorylated in quiescent human leiomyosarcoma cells. Serum stimulation of the cells resulted in dissociation of MYPT1 from myosin and PP1C in parallel with an increase in the level of Thr853 phosphorylation. The C-terminal domain of human MYPT1(495-1030) was responsible for the binding to the N-terminal portion of myosin light meromyosin. The spontaneous phosphorylation at Thr696 may adjust the basal activity of cellular MLCP and affect the temporal phosphorylation at Thr853 that is synchronized with myosin targeting.