IN the caudate-putamen the glutamatergic cortical input and the dopaminergic nigrostriatal input have opposite effects on the firing rate of striatal neurons l-4. Although little is known of the biochemical mechanisms underlying this antagonism, one action of dopamine is to stimulate the cyclic AMP-dependent phosphorylation of DARPP-32 (dopamine and cAMP-regulated phospho-protein, of relative molecular mass 32,000 (32K))5. This phos-phorylation converts DARPP-32 from an inactive molecule into a potent inhibitor of protein phosphatase-1 (ref. 6). Here we show that activation of the NMDA (TV-methyl-D-aspartate) subclass of glutamate receptors reverses the cAMP-stimulated phos-phorylation of DARPP-32 in striatal slices through NMDA-induced dephosphorylation of DARPP-32. Thus, the antagonistic effects of dopamine and glutamate on the excitability of striatal neurons are reflected in antagonistic effects of these neurotransmitters on the state of phosphorylation of DARPP-32. Our results indicate that stimulation of NMDA receptors leads to the activation of a neuronal protein phosphatase, presumably the calcium-dependent phosphatase calcineurin, and show, in an intact cell preparation, that signal transduction in the nervous system can be mediated by protein dephosphorylation. © 1990 Nature Publishing Group.