PNUTS, Phosphatase 1 NUclear Targeting Subunit, is a recently described protein that targets protein phosphatase 1 (PP1) to the nucleus. In the present study, we characterized the biochemical properties of PNUTS. A variety of truncation and site-directed mutants of PNUTS were prepared and expressed either as GST-fusion proteins in E. coli, or as FLAG-tagged proteins in 293T cells. A 50-amino acid domain in the center of PNUTS mediated both high-affinity PP1 binding and inhibition of PP1 activity. The PP1-binding domain is related to a motif found in several other PP1-binding proteins, but is distinct in that Trp replaces Phe. Mutation of the Trp residue essentially abolished the ability of PNUTS to bind to, and inhibit PP1. The central PP1-binding domain of PNUTS was an effective substrate for protein kinase A in vitro, and phosphorylation substantially reduced the ability of PNUTS to bind to PP1 in vitro, and following stimulation of protein kinase A in intact cells. In vitro RNA-binding experiments showed that a C-terminal region including several RGG motifs and a novel repeat domain rich in His and Gly, interacted with mRNA and single-stranded DNA. PNUTS exhibited selective binding for poly(A) and poly(G) compared to poly(U) or poly(C) ribonucleotide homopolymers, with specificity being mediated by distinct regions within the domain rich in His and Gly, and the domain containing the RGG motifs. Finally, a PNUTS/PP1 complex was isolated from mammalian cell lysates using RNA-conjugated beads. Together, these studies support a role for PNUTS in protein kinase A-regulated targeting of PP1 to specific RNA-associated complexes in the nucleus.