To characterize the biochemical properties of the PP2A regulatory B subunit, PPP2R5D, we analyzed its phosphorylation sites, stoichiometry and effect on holoenzyme activity. PPP2R5D was phosphorylated on Ser-53, Ser-68, Ser-81, and Ser-566 by protein kinase A, and mutations at all four of these sites abolished any significant phosphorylation in vitro. In HEK293 cells, however, the Ser-566 was the major phosphorylation site after PKA activation by forskolin, with marginal phosphorylation on Ser-81. Inhibitory tyrosine phosphorylation on Tyr-307 of the PP2A catalytic C subunit was decreased after forskolin treatment. Kinetic analysis showed that overall PP2A activity was increased with phosphorylation by PPP2R5D phosphorylation. The apparent Km was reduced from to with PPP2R5D phosphorylation, resulting in an increase in catalytic activity. These data suggest that PKA-mediated activation of PP2A is enabled by PPP2R5D phosphorylation, which modulates the affinity of the PP2A holoenzyme to its physiological substrates.