Phosphatases act in opposition to kinases/phosphorylases, which add phosphate groups to proteins. The addition of a phosphate group may activate or de-activate an enzyme (e.g., kinase signalling pathways) or enable a protein-protein interaction to occur (e.g., SH2 domains ); therefore phosphatases are integral to many signal transduction pathways. Phosphate addition and removal do not necessarily correspond to enzyme activation or inhibition, and that several enzymes have separate phosphorylation sites for activating or inhibiting functional regulation.  CDK, for example, can be either activated or deactivated depending on the specific amino acid residue being phosphorylated. Phosphates are important in signal transduction because they regulate the proteins to which they are attached.  To reverse the regulatory effect, the phosphate is removed. This occurs on its own by hydrolysis, or is mediated by protein phosphatases.
Protein phosphorylation plays a crucial role in biological functions and controls nearly every cellular process, including metabolism, gene transcription and translation, cell-cycle progression, cytoskeletal rearrangement, protein-protein interactions, protein stability, cell movement, and apoptosis. These processes depend on the highly regulated and opposing actions of PKs and PPs, through changes in the phosphorylation of key proteins. Histone phosphorylation, along with methylation, ubiquitination, sumoylation and acetylation, also regulates access to DNA through chromatin reorganisation.
One of the major switches for neuronal activity is the activation of PKs and PPs by elevated intracellular calcium. The degree of activation of the various isoforms of PKs and PPs is controlled by their individual sensitivities to calcium. Furthermore, a wide range of specific inhibitors and targeting partners such as scaffolding, anchoring, and adaptor proteins also contribute to the control of PKs and PPs and recruit them into signalling complexes in neuronal cells. Such signalling complexes typically act to bring PKs and PPs in close proximity with target substrates and signalling molecules as well as enhance their selectivity by restricting accessibility to these substrate proteins. Phosphorylation events, therefore, are controlled not only by the balanced activity of PKs and PPs but also by their restricted localisation. Regulatory subunits and domains serve to restrict specific proteins to particular subcellular compartments and to modulate protein specificity.  These regulators are essential for maintaining the coordinated action of signalling cascades, which in neuronal cells include short-term (synaptic) and long-term (nuclear) signalling. These functions are, in part, controlled by allosteric modification by secondary messengers and reversible protein phosphorylation.
It is thought that around 30% of known PPs are present in all tissues, with the rest showing some level of tissue restriction. While protein phosphorylation is a cell-wide regulatory mechanism, recent quantitative proteomics studies have shown that phosphorylation preferentially targets nuclear proteins. Many PPs that regulate nuclear events, are often enriched or exclusively present in the nucleus. In neuronal cells, PPs are present in multiple cellular compartments and play a critical role at both pre- and post-synapses, in the cytoplasm and in the nucleus where they regulate gene expression.
Phosphoprotein phosphatase is activated by the hormone insulin, which indicates that there is a high concentration of glucose in the blood. The enzyme then acts to dephosphorylate other enzymes, such as phosphorylase kinase, glycogen phosphorylase, and glycogen synthase. This leads to phosphorylase kinase and glycogen phosphorylase's becoming inactive, while glycogen synthase is activated. As a result, glycogen synthesis is increased and glycogenolysis is decreased, and the net effect is for energy to enter and be stored inside the cell.